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20 December, 12:46

If you attended Mt. IveySchmivey-with a 4 year tuition of $125,000-and paid a monthly loan payment of $562 (roughly 15% of your $45,000 salary as a social worker), how long would it take you to pay off a student loan at a 5% interest rate?

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Answers (2)
  1. 20 December, 14:02
    0
    Use the formula of the present value of annuity ordinary

    A=p [ (1 - (1+I) ^-kn) / I]

    Solve for n

    N=[log ((AI/p) - 1) / log (1+I) ]/-k equation

    A 125000

    I 0.05/12

    P 562

    K 12

    Plug in the equation above

    N=52.39 years round your answer

    N=52.4 years

    So the answer is c
  2. 20 December, 14:31
    0
    It will 19.5 years.

    Tuition=$125,000

    Interest rate = 5%

    5% of $125,000 = $6,250

    $125,000 + $6,250 = $131,250

    $131,250/$562 (monthly payment) = 233.540925

    233.540925/12 (months in a year) = 19.4617438

    round up and it 19.5 years
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