Upon graduation from college, Warren Roberge was able to defer payment on his $33 comma 000 student loan for 9 months. Since the interest will no longer be paid on his behalf, it will be added to the principal until payments begin. If the interest is 4.55 % compounded monthly , what will the principal amount be when he must begin repaying his loan?

Question

Elvis Hancock

Business

29 January, 09:33

Upon graduation from college, Warren Roberge was able to defer payment on his $33 comma 000 student loan for 9 months. Since the interest will no longer be paid on his behalf, it will be added to the principal until payments begin. If the interest is 4.55 % compounded monthly , what will the principal amount be when he must begin repaying his loan?

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Answers (1)

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Lyla Proctor · Answer 1

Answer: $ 34143.356

Explanation:

Solution

Compound interest A = P (1 + i) ^ 9

Where i is the rate

Future value of the loan after 9 months

P = 33000, i = 4.55/100 = 0.0455:12

n = 9

Substitute the values into the above formular

A = 33000 (1 + 0.0455/12) ^9

A = $ 34143.356