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Questions: Suppose that you plan to borrow $15,000 student loans to attend UM-Dearborn. You are considering borrowing the loan from College Avenue. College Avenue offers

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Questions: Suppose that you plan to borrow $15,000 student loans to attend UM-Dearborn. You are considering borrowing the loan from College Avenue. College Avenue offers two options for the repayment of your loan. One is the deferred repayment option and the other is interest repayment option. The APR for the deferred repayment option is 3.75% and the APR for the interest repayment option is 3.15%. You plan to finish your undergraduate study in UM-Dearborn within five years. The two repayment options are described as below: Deferred repayment option: _You make no scheduled student loan payments for 5 years while you are in school and in 1 year of the grace period after you graduate. However, the unpaid interest every month will be added to your principal amount at the end of your grace period. After the grace period, the total amount your will pay will be equal to the principal you borrow and the accumulated unpaid interest. Each month you will be required to pay the same amount, which includes interest and the required principal repayment. You are required to completely pay off your loan within 10 years. Interest repayment option: You pay interest every month when you are in school and in grace period. After the grace period, you will start to pay the principal of the loan. Each month you will be required to pay the same amount, which includes interest and the required principal repayment. You are required to completely pay off your loan within 10 years. 1. Please use Excel to work on the following questions: 1) Set up the loan amortization tables for the loans with these two different repayment options, respectively. 2) How much interest will you pay in total when you pay off your loan offered by these two different repayment options, respectively? 3) How much will you pay in total, including interest and principal, for these two different repayment options, respectively? 2. Write one-page memo to summarize your results obtained in the first question and discuss which repayment option you would like to choose. You can address the memo to Prof. Xie

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