Paying off your student loan.

We found this information about student loans on the website for Colorado$$s Red

Rocks Communtity College.

Direct debit is the most convenient way to make your student loan

payments $$ on time, every month. Direct debit is a free service. You

may qualify for a $0\mathrm{.}25\%$ interest rate reduction when actively making

payments on Direct Debit. $[$R$125]$

$($a$)$ Explain how direct debit works. $($You may need to look this up$.$ You may want to

look it up even if you think you know.$)$

$($b$)$ If you have a student loan on which you pay interest at a rate of $6\mathrm{.}8\%$ what will your

interest rate be if you sign up for direct debit?

$($c$)$ Why should the quotation say $0\mathrm{.}25$ percentage point interest rate reduction$$ in$-$

stead of $0\mathrm{.}25\%$ interest rate reduction$?$

$($d$)$ If the quotation really means what it says, what will the interest rate be on your

$6\mathrm{.}8\%$ loan if you sign up for direct debit?