Answer:
Monthly payment=408.65
Step-by-step explanation:
The total amount on the student loan can be expressed as;
A=P(1+r/n)^nt
where;
A=Total amount
P=Principal loan amount
r=Annual interest rate
n=number of times the interest is applied per unit time
t=number of periods
In our case;
P=17,500
r=9/100=0.09
n=1
t=20 years
Replacing;
A=17,500(1+0.09)^20
A=17,500×1.09^20
A=98,077.19
Total amount to be paid in 20 years=98,077.19
Yearly amount to be paid=Total amount/Number of years
Yearly amount to be paid=(98,077.19/20)=4,903.86
Monthly amount to be paid=Yearly amount paid/Number of months in a year
Monthly amount to be paid=(4,903.86/12)=408.65
Monthly payment=408.65
