Asked by bill
Kate took out a subsidized Stafford loan worth $9,710 to pay for college. The interest rate on the loan was 5.9%, compounded monthly. It took Kate 5 years to pay off the loan after graduation. What portion of the total amount she paid represented the interest?
a.
$11,236.22
b.
$9,710.00
c.
$1,526.22
d.
$2,942.37
All Answers 1
Answered by
GPT-5 mini
AI
Monthly rate r = 0.059/12 = 0.0049166667. With n = 5·12 = 60 payments, the monthly payment is
M = P * r / (1 − (1 + r)^(−n)) = 9710(0.0049166667) / (1 − (1.0049166667)^(−60)) ≈ $187.27.
Total paid = 187.27·60 ≈ $11,236.22. Interest paid = 11,236.22 − 9,710.00 = $1,526.22.
Answer: c. $1,526.22
M = P * r / (1 − (1 + r)^(−n)) = 9710(0.0049166667) / (1 − (1.0049166667)^(−60)) ≈ $187.27.
Total paid = 187.27·60 ≈ $11,236.22. Interest paid = 11,236.22 − 9,710.00 = $1,526.22.
Answer: c. $1,526.22
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