Liam just graduated from his state university with $28 comma 90228,902 in student loan debt. He is curious what his monthly payments will be if he repays over the standard 1010 years at 88 percent. Liam also has an emergency fund that pays 33 percent. Should he use some of that money to repay his student loans early? Why? Note: Round intermediate computations to at least five (5) decimal places. Click on the table icon to view the Monthly Installment Loan Payment Factor (MILPF) table: LOADING... . Question content area bottom Part 1 Liam's monthly payment is $350.72350.72. (Round to the nearest cent.) Part 2 Should Liam use some of the money in his emergency fund to repay the loan early? Why? (Select the best answer below.) A. Liam should not use some of the money in his emergency fund to repay his loan early. Although the 33% is less than the interest on the loan, which is 88%, repaying his student loan is not an emergency. B. Liam should not use some of the money in his emergency fund to repay his loan early because the 33% is less than the interest on the loan, which is 88%. He would give up more in interest earned by using some of the money than he would pay in interest if he repaid the loan over the full 1010 years. C. Liam can use some of the money in his emergency fund to repay his loan early because the 33% is less than the interest on the loan, which is 88%. He would give up less in interest earned by using some of the money than he would pay in interest if he repaid the loan early. If he does so, he should funnel any reduced payments back into his emergency fund to rebuilt it. D. Liam should use some of the money in his emergency fund to repay his loan early because the 88% is less than the interest on the loan, which is 33%. He would give up less in interest earned by using some of the money than he would pay in interest if he repaid the loan over the full 1010 years.

Liam just graduated from his state university with $28 comma 90228,902 in student loan debt. He is curious what his monthly payments will be if he repays over the standard 1010 years at 88 percent. Liam also has an emergency fund that pays 33 percent. Should he use some of that money to repay his student loans early? Why? Note: Round intermediate computations to at least five (5) decimal places. Click on the table icon to view the Monthly Installment Loan Payment Factor (MILPF) table: LOADING... . Question content area bottom Part 1 Liam's monthly payment is $350.72350.72. (Round to the nearest cent.) Part 2 Should Liam use some of the money in his emergency fund to repay the loan early? Why? (Select the best answer below.) A. Liam should not use some of the money in his emergency fund to repay his loan early. Although the 33% is less than the interest on the loan, which is 88%, repaying his student loan is not an emergency. B. Liam should not use some of the money in his emergency fund to repay his loan early because the 33% is less than the interest on the loan, which is 88%. He would give up more in interest earned by using some of the money than he would pay in interest if he repaid the loan over the full 1010 years. C. Liam can use some of the money in his emergency fund to repay his loan early because the 33% is less than the interest on the loan, which is 88%. He would give up less in interest earned by using some of the money than he would pay in interest if he repaid the loan early. If he does so, he should funnel any reduced payments back into his emergency fund to rebuilt it. D. Liam should use some of the money in his emergency fund to repay his loan early because the 88% is less than the interest on the loan, which is 33%. He would give up less in interest earned by using some of the money than he would pay in interest if he repaid the loan over the full 1010 years.

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter14: Planning For Retirement

Section: Chapter Questions

Problem 8FPE

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Question content area bottom

Part 1

Liam's monthly payment is

$350.72350.72.

(Round to the nearest cent.)

Part 2

Should Liam use some of the money in his emergency fund to repay the loan early? Why? (Select the best answer below.)

Liam should not use some of the money in his emergency fund to repay his loan early. Although the

33%

is less than the interest on the loan, which is

88%,

repaying his student loan is not an emergency.

Liam should not use some of the money in his emergency fund to repay his loan early because the

33%

is less than the interest on the loan, which is

88%.

He would give up more in interest earned by using some of the money than he would pay in interest if he repaid the loan over the full

1010

years.

Liam can use some of the money in his emergency fund to repay his loan early because the

33%

is less than the interest on the loan, which is

88%.

He would give up less in interest earned by using some of the money than he would pay in interest if he repaid the loan early. If he does so, he should funnel any reduced payments back into his emergency fund to rebuilt it.

Liam should use some of the money in his emergency fund to repay his loan early because the

88%

is less than the interest on the loan, which is

33%.

He would give up less in interest earned by using some of the money than he would pay in interest if he repaid the loan over the full

1010

years.

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