6. Rodrigo is attending a 4-year college. As a freshman, he was approved for a 10-year, federal
unsubsidized student loan in the amount of $5,300 at 4.29%. He knows he has the option of
beginning repayment of the loan in 4.5 years. He also knows that during this non-payment
period, interest will accrue at 4.29%. (Round all monthly payment calculations to 2 decimal
places.)
a. How much interest will Rodrigo accrue during the 4.5-year non-payment period?
b. If Rodrigo decides to make no payments during the 4.5 years, the interest will be
capitalized at the end of that period. What will the new principal be when he begins
making loan payments?
How much interest will he pay over the life of the loan?
c. Suppose Rodrigo only paid the interest during his 4 years in school and the 6-month
grace period. What will he now pay in interest over the term of his loan?