Viola took out a $8,470 Stafford loan at the beginning of her four-year college career. The loan has a duration of ten years and an interest rate of 7.5%, compounded monthly. How much more will Viola’s monthly payment be if the loan is unsubsidized than if the loan is subsidized? Round all dollar values to the nearest cent.
a.
$35.05
b.
$45.94
c.
$96.96
d.
$63.52
Subsidized means that the loan is need based, so there is no interest while in school. Unsubsidized means that it is not need based, and thus Viola is responsible for all interest during school.
