1. What is the difference between a standard and graduated payment plan?
2. What is one reason you want to avoid going into default?
Complete either A or B. (A) calculates a student loan. (B) calculates a mortgage.
There are 9 questions in this assignment, 2 from above and 7 from the exercise below. On an index card, write the number of each question and its answer. Don't forget your full name! The correctly completed assignment is worth 15,000 participation points and is due when class begins on Dec 2.
Input the following parameters into the calculator:
Loan Balance: 40,000
Interest Rate: 4.66
Loan Fees: 0
Loan Term (Years): 10
Minimum Payment: 50
Enrollment Status: Still in school
Degree Program: Bachelor's
Total Years in College: 4
Print payment schedule? yes
3. What is the total number of payments? (In other words, in how many years/months will it be paid off?)
4. What is the monthly payment?
5. What is the total cumulative interest at the end of the loan?
Now, recalculate the loan with one change - put $517.65 as a minimum payment. This is the equivalent of paying an extra $100 a month above the required payment.
6. What is the total number of payments? (In other words, in how many years/months will it be paid off?)
7. What is the total interest paid?
Finally, change the minimum payment back to 50 and change the interest rate to 6.8%.
8. What is the monthly payment?
9. What is the total cumulative interest at the end of the loan?