Congratulations! You have just graduated from college and are determining what your monthly student loan payments will be.After consolidating all of your loans,you have a balance of $18,000.At 8% APR for 10 years,what will your monthly payments be?

Question

Quizplus · Accepted Answer

To calculate monthly payment for the loan, we need to use the formula:

monthly payment = (P * r) / (1 - (1 + r)^(-n))

Where, 
P = loan balance = $18,000
r = monthly interest rate = 8% / 12 = 0.00667
n = number of payments = 10 years * 12 months = 120

Plugging in these values in the formula, we get:

monthly payment = ($18,000 * 0.00667) / (1 - (1+0.00667)^(-120)) = $218.39

Therefore, the monthly payment will be $218.39, which is closest to answer choice C.

Congratulations! You Have Just Graduated from College and Are Determining