Task:
Assume you are earning a salary of $40,000 per year at your first job.
Option 1:
With a $40,000 student loan debt you have several options for student loan repayment.
Assume that you are a new borrower and have only borrowed directly from the US Government. Calculate your 1st monthly payment amount using an average 4% annual interest rate compounded monthly for the following payment options:
Standard repayment: 10 years
Extended repayment: 25 years
Income-based repayment - to find this payment amount you will need to go to the www.studentloans.gov and input the assumptions.
Option 2:
If you have your own student loans, use this information to calculate the monthly amount of your estimated student loan debt. It would be helpful to show the amount of student loan debt by year and the associated interest rate.
Standard repayment: 10 years
Extended repayment: 25 years
Income-based repayment - to find this payment amount you will need to go to the www.studentloans.gov and input the assumptions.
Paper details:
Regardless of which option you use to calculate loan payment amounts, write a paper that shows what your loan repayment options are.
In your paper show what the amounts would be for the 1st payment under the three different plans, then select the loan repayment plan you would choose and explain why you selected that option.