Respuesta :
The total amount of interest will Gertrude pay by the time the subsidized Stafford loan is repaid is $2094.80.
What is compound interest?
Compound interest is the amount charged on the principal amount and the accumulated interest with a fixed rate of interest for a time period.
The formula for the final amount with the compound interest formula can be given as,
[tex]A=P\times\left(1+\dfrac{r}{n\times100}\right)^{nt}\\[/tex]
Here, A is the final amount (principal plus interest amount) on the principal amount P of with the rate r of in the time period of t.
Gertrude will graduate four years after taking out the loan. if the loan has an interest rate of 6.8%, compounded monthly, and Gertrude makes monthly payments.
Put the values in the above formula as,
[tex]5500=P_{mt}\times\left(1-\dfrac{6.8}{12\times100}\right)^{-12\times10}\\P_{mt}=63.29[/tex]
In the 10 years, the refund she gets,
[tex]A_r=63.29\times12\times100\\A_r=7594.8[/tex]
Interest paid by her is,
[tex]I=7594.8-5500\\I=2094.8[/tex]
Thus, the total amount of interest will Gertrude pay by the time the subsidized Stafford loan is repaid is $2094.80.
Learn more about the compound interest here;
https://brainly.com/question/24274034
