Part 3: Paying Off the Loan Although everyone will realistically have a different amount of student loans, you will choose the amount below that best reflects the type of education needed for your desired job. You will use this amount as your "loan amount" for the remainder of this lab. In 2019, The average student loan debt after completing a 2-year degree was $19,600. The average student loan debt after completing a 4-year degree was $29,900. The average student loan debt after completing a master's degree was $44,900. The average student loan interest rate across all types of student loans is 4.53%. Everyone will use this interest rate for the remainder of this lab. In addition, typical loan repayment time is 15 years. 1. From the list provided above, determine what your "loan amount" will be for this lab. (2 points) 2. Set up an amortization table for the life of this loan. (50 points) 3. What will your monthly payment be for the loan? (3 points) 4. What percentage of your monthly take-home pay will you be contributing toward your loan? (3 points) 5. Explain why your monthly payments towards your student loan will or will be not affordable based on your monthly take-home pay. Be specific in your response. (3 points) 6. How much interest will you pay over the lifetime of the 15-year loan? (3 points) 7. How long would it take you to pay off this loan if you decided to contribute $50 more each month than what you determined your monthly payment? (3 points) 8. Based on your monthly take home pay, is contributing $50 more a month a realistic goal? Be specific in your response. (3 points) 9. Since this is a 15-year loan, it is not surprising that you will pay a lot in interest over the lifetime of that loan. Remember, you can always pay your loans off more quickly than 15 years. If you want to pay off the loan in 10 years instead, what would your monthly payments have to be? (3 points) 10. How much more would your monthly payment be if you paid off the loan in 10 years rather than 15 years? (3 points) 11. If you opt to make the monthly payments to pay off the loan in 10 years, how much interest would you pay over the lifetime of that loan? (3 points) 12. How much more interest would you pay if you paid off the loan in 15 years than 10 years? (3 points) Part 3: Paying Off the Loan Although everyone will realistically have a different amount of student loans, you will choose the amount below that best reflects the type of education needed for your desired job. You will use this amount as your "loan amount" for the remainder of this lab. In 2019, The average student loan debt after completing a 2-year degree was $19,600. The average student loan debt after completing a 4-year degree was $29,900. The average student loan debt after completing a master's degree was $44,900. The average student loan interest rate across all types of student loans is 4.53%. Everyone will use this interest rate for the remainder of this lab. In addition, typical loan repayment time is 15 years. 1. From the list provided above, determine what your "loan amount" will be for this lab. (2 points) 2. Set up an amortization table for the life of this loan. (50 points) 3. What will your monthly payment be for the loan? (3 points) 4. What percentage of your monthly take-home pay will you be contributing toward your loan? (3 points) 5. Explain why your monthly payments towards your student loan will or will be not affordable based on your monthly take-home pay. Be specific in your response. (3 points) 6. How much interest will you pay over the lifetime of the 15-year loan? (3 points) 7. How long would it take you to pay off this loan if you decided to contribute $50 more each month than what you determined your monthly payment? (3 points) 8. Based on your monthly take home pay, is contributing $50 more a month a realistic goal? Be specific in your response. (3 points) 9. Since this is a 15-year loan, it is not surprising that you will pay a lot in interest over the lifetime of that loan. Remember, you can always pay your loans off more quickly than 15 years. If you want to pay off the loan in 10 years instead, what would your monthly payments have to be? (3 points) 10. How much more would your monthly payment be if you paid off the loan in 10 years rather than 15 years? (3 points) 11. If you opt to make the monthly payments to pay off the loan in 10 years, how much interest would you pay over the lifetime of that loan? (3 points) 12. How much more interest would you pay if you paid off the loan in 15 years than 10 years? (3 points)
