document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1198834>Question 1198834</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Suppose that your unsubsidized Stafford loans plus accumulated interest total $ 35000 at the time you start repayment, the interest rate is 6% APR, and you elect the standard repayment plan of a fixed amount each month for 10 years. What is your monthly repayment?\r<BR>\n" );
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document.write( "Repayment amount = \r<BR>\n" );
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document.write( "How much will you pay in interest?<BR>\n" );
document.write( "Interest paid =  </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #848285 by </B><A HREF=/tutors/aboutme.mpl?userid=CPhill><B>CPhill(1959)</B></A><img src=\"/images/stars/stars-12.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=CPhill><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=CPhill><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=848285\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> **a) Monthly Repayment:**\r<BR>\n" );
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document.write( "* **Principal:** $35,000<BR>\n" );
document.write( "* **Annual Interest Rate:** 6% (0.06)<BR>\n" );
document.write( "* **Monthly Interest Rate:** 0.06 / 12 = 0.005<BR>\n" );
document.write( "* **Loan Term (months):** 10 years * 12 months/year = 120 months\r<BR>\n" );
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document.write( "**Formula for Monthly Repayment (using the present value of an annuity):**\r<BR>\n" );
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document.write( "* **Monthly Repayment = (Principal * Monthly Interest Rate) / (1 - (1 + Monthly Interest Rate)^(-Number of Payments))**\r<BR>\n" );
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document.write( "* **Monthly Repayment = ($35,000 * 0.005) / (1 - (1 + 0.005)^(-120))** <BR>\n" );
document.write( "* **Monthly Repayment ≈ $388.57**\r<BR>\n" );
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document.write( "**b) Total Interest Paid:**\r<BR>\n" );
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document.write( "* **Total Amount Repaid:** Monthly Repayment * Number of Payments = $388.57 * 120 = $46,628.40<BR>\n" );
document.write( "* **Total Interest Paid:** Total Amount Repaid - Principal = $46,628.40 - $35,000 = **$11,628.40**\r<BR>\n" );
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document.write( "**Therefore:**\r<BR>\n" );
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document.write( "* **Monthly Repayment:** $388.57<BR>\n" );
document.write( "* **Total Interest Paid:** $11,628.40<BR>\n" );
document.write( " </SPAN>\n" );
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