Only read question 1 as you will need the months in it to answer the other questions.

1:Suppose that you take out a student loan of $8,500 on September 1 before your junior year. You will graduate 21 months later and will have a grace period of 6 months before you are required to start making payments. Thus, you will begin making payments on December 1, which is 27 months after you took out the loan. The rate of simple interest is 4.2%. How much do you owe on that day and how much of that is interest?

Now use question 1 to answer the question 2 :

2) a: Suppose that you take out student loans on September 1 of each year. You borrow $6,000 at the beginning of your freshman year; $7,000 at the beginning of your sophomore year; $8,000 at the beginning of your junior year; and $8,000 at the beginning of your senior year. The rate of simple interest is still 4.2% and again you have a 6 month grace period, so you do not make any payments until December 1 of the year you graduate. How much do you owe on that day and how much of that is interest?

2) b:The result of four years of borrowing means that on September 1 of the year you graduate, you owe more than you can repay at one time. You decide on the 10-year fixed payment plan. From this point, the 4.2% interest will be compounded monthly. How much will your monthly payment be? How much will you pay in interest?

2) c: Because the amount you owe is large enough (over $30,000), you have the option of repaying over a 25-year period. You decide on the 25-year fixed payment plan. From this point, the 4.2% interest will be compounded monthly. How much will your monthly payment be? How much will you pay in interest?

3) You borrowed $330,000 to buy a house at 4.8% interest, compounded semi-annually, and plan to pay back the loan (principal and interest) at the end of 30 years. How much will you pay back at that time?