If you need to take out a $20,000 student loan 2 years before graduating, which loan option will result in the lowest overall cost to you: a subsidized loan with 6.9% interest for 10 years, a federal unsubsidized loan with 5.8% interest for 10 years, or a private loan with 5.0% interest and a term of 15 years? How much would you save over the other options? All payments are deferred for 6 months after graduation and the interest is capitalized. (a) Find the total cost of the subsidized loan. The total cost of the subsidized loan is $ Round your answer to two decimal places, if necessary.

If you need to take out a $20,000 student loan 2 years before graduating, which loan option will result in the lowest overall cost to you: a subsidized loan with 6.9% interest for 10 years, a federal unsubsidized loan with 5.8% interest for 10 years, or a private loan with 5.0% interest and a term of 15 years? How much would you save over the other options? All payments are deferred for 6 months after graduation and the interest is capitalized. (a) Find the total cost of the subsidized loan. The total cost of the subsidized loan is $ Round your answer to two decimal places, if necessary.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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If you need to take out a $50,000 student loan 2 years before graduating, which loan option will result in the lowest overall cost to you: a subsidized loan with 7.5% interest for 10 years, a federal unsubsidized loan with 5.9% interest for 10 years, or a private loan with 5.0% interest and a term of 15 years? How much would you save over the other options? All payments are deferred for 6 months after graduation and the interest is capitalized. A) Find the total cost of the subsidized loan? B) Find the total cost of the unsubsidized loan? C) Find the total cost of the private loan? D)Which loan has the overall lowest cost, and how much would you save over the other options? E) How much would the the subsidized loan save you over the federal unsubsidized loan? and how much would the private loan save you?
If you need to take out a $50,000 student loan 2 years before graduating, which loan option will result in the lowest overall cost to you: a subsidized loan with 7.5% interest for 10 years, a federal unsubsidized loan with 5.9% interest for 10 years, or a private loan with 5.0% interest and a term of 15 years? How much would you save over the other options? All payments are deferred for 6 months after graduation and the interest is capitalized. Part: 0 / 5 0 of 5 Parts Complete Part 1 of 5 (a) Find the total cost of the subsidized loan. The total cost of the subsidized loan is $ . Round your answer to two decimal places, if necessary. (B) Find the total cost of the unsubsidized loan? (C) Find the total cost of the private loan? (D) Which loan has the overall lowest cost,and how much would you save over the other options?
You are considering purchasing a car with a sticker price of $50,000 (nonnegotiable with no down payment required). You wish to make monthly payments for five years and the most you can afford to pay is $1,200 a month. The credit union has agreed to loan you the money at a 7% annual interest rate. Create an amoritization table for the amount the bank wants you to pay and another table for the amount we can actually afford of $1,200.
If you need to take out a $70,000 student loan 2 years before graduating, which loan option will result in the lowest overall cost to you: a subsidized loan with 6.9% interest for 10 years, a federal unsubsidized loan with 5.9% interest for 10 years, or a private loan with 7.0% interest and a term of 16 years? How much would you save over the other options? All payments are deferred for 6 months after graduation and the interest is capitalized. A) Find the total cost of the subsidized loan? B) Find the total cost of the unsubsidized loan? C)Find the total cost of the private loan? D) Which loan has the overall lowest cost, and how much would you save over the other options? E) How much would the subsidized loan save you over the federal unsubsidized loan, and the savings on the private loan?
If you need to take out a $50,000 student loan 2 years before graduating, which loan option will result in the lowest overal cost to you: a subsidized loan with 6.8% interest for 10 years, a federal unsubsidized loan with 5.6% interest for 10 years, or a private loan with 5.0% interest and a term of 13 years? How much would you save ever the other options? All payments are deferred for 6 months after graduation and the interest is capitalized. (a) Find the total cost of the subsidized loan. The total cost of the subsidized loan isS Round your answer to two decimal places, if necessary る回回@
You need $20,000 to purchase a used car. Your wealthy uncle is willing to lend you the money as an amortized loan. He would like you to make annual payments for 6 years, with the first payment to be made one year from today. He requires a 7% annual return. What will be your annual loan payments? Do not round intermediate calculations. How much of your first payment will be applied to interest and to principal repayment? Do not round intermediate calculations. Round your answers to the nearest cent.
You have an outstanding student loan with required payments of $600 per month for the next four years. The interest rate on the loan is 10% APR. You are considering making an extra payment of $150 today (that is, you will pay an extra $150 that you are not required to pay). If you are required to continue to make payments of $600 per month until the loan is paid off, what is the amount of your final payment? What effective rate of return (expressed as an APR with monthly compounding) have you earned on the $150? Now that you realize your best investment is to prepay your student loan, you decide to prepay as much as you can each month. Looking at your budget, you can afford to pay an extra $300 per month in addition to your required monthly payments of $600, or $900 in total each month. How long will it take you to pay off the loan?
An individual wishes to borrow $10,000 for a year and is offered the following alternatives: a. A 10 percent loan discounted in abvances b. An 11 percent straight loan (interest paid at maturity) Which loan is more expensive?
You are considering buying a car (sticker price of $43,000) but need financing. The car dealership has offered you two loan options: Loan A requires a $1,750 downpayment with the remainder financed over 5 years with monthly payments based on a contractual rate of interest of 4.1%; Loan B requires no downpayment with the balance financed at zero percent over 4 years with monthly payments. If you opt for Loan A you are eligible for an immediate $3,000 rebate on the car; no rebate is offered on the zero percent financing deal. The market rate for the risks that you pose is 7.1%. The car has a market value of $36,000. Assume you have chosen Loan A. How much interest do you pay in the second year of the loan? [Don't round interim calculations] Multiple Choice $7,330.92 $5,460.18 $1,142.99 $2,524.12 None of the above
You are considering buying a car (sticker price of $43,000) but need financing. The car dealership has offered you two loan options: Loan A requires a $1,750 downpayment with the remainder financed over 5 years with monthly payments based on a contractual rate of interest of 4.1%; Loan B requires no downpayment with the balance financed at zero percent over 4 years with monthly payments. If you opt for Loan A you are eligible for an immediate $3,000 rebate on the car; no rebate is offered on the zero percent financing deal. The market rate for the risks that you pose is 7.1%. The car has a market value of $36,000. Assume you have chosen Loan A and would like to pay it off three years into the transaction. How much would you have to pay to retire the debt? [Don't round interim calculations] Multiple Choice $15,756.18 $16,244.96 $17,465.14 $23,882.16 None of the above
You need $12,000 to purchase a used car. Your wealthy uncle is willing to lend you the money as an amortized loan. He would like you to make annual payments for 4 years, with the first payment to be made one year from today. He requires an 8% annual return. What will be your annual loan payments? Do not round intermediate calculations. Round your answer to the nearest cent. $ How much of your first payment will be applied to interest and to principal repayment? Do not round intermediate calculations. Round your answers to the nearest cent. Interest: $ Principal repayment: $
You are considering buying a car (sticker price of $43,000) but need financing. The car dealership has offered you two loan options: Loan A requires a $1,750 downpayment with the remainder financed over 5 years with monthly payments based on a contractual rate of interest of 4.1%; Loan B requires no downpayment with the balance financed at zero percent over 4 years with monthly payments. If you opt for Loan A you are eligible for an immediate $3,000 rebate on the car; no rebate is offered on the zero percent financing deal. The market rate for the risks that you pose is 7.1%. The car has a market value of $36,000. How much value do you destroy with Loan B? [Don't round interim calculations] Multiple Choice $0.00 $3,596.89 $1,337.80 $7,000.00 $2,433.11

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