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blsea [12.9K]
2 years ago
7

After graduation, you decide that you can pay $203.24 per month extra on your student loan (standard monthly payment is 302.99),

which has a balance of $50,000 and 20 years of monthly payments remaining. The annual interest rate on the loan is 4% How many years early will you be able to pay off the loan?
Business
1 answer:
Bumek [7]2 years ago
6 0

Answer:

120 months or 10 years earlier

Explanation:

The computation of the number of years early would pay off the loan is  shown below:

By using the financial calculator

RATE = 4% ÷ 12

P V = $50,000

PMT= -$203.24 - $302.99

FV = 0

CPT N=120

Now for extra payment it would take 120 months

And without extra payment it would take

= 20 × 12

= 240 months  

So either 120 months or 10 years earlier

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Answer:

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