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Sofia just graduated from college and owes $ 28 , 500 $28,500 on her student loans. The bank charges an annual interest rate of 4.8%, compounded monthly. If Sofia wants to pay off her student loans using equal monthly payments over the next 11 years, what would the monthly payment be, to the nearest dollar?

Respuesta :

adioabiola

The amount Sofia has to pay using equal amounts over the next 11 years is; = $4340

Compound Interest

The actual amount owed by Sofia is; $28,500

If the annual compound interest rate is 4.8%

The final amount is;

  • A = P(1 + r)^(nt).

  • A = 28500(1 + 0.048)¹¹

  • A = 28500(1.048)11

  • A = 28500 × 1.675

  • A = 47,737.5

The amount Sofia has to pay using equal amounts over the next 11 years is; $47,737.5/11

Annual payment = $4340

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