Question 951972
Jim is an idiot.  Taking out that sort of student loan in this economy is stupid.  Additionally, if he took out a government student loan, that $2500 goes to the interest, not the principal -- even if he pays it early.
<br>
Let's assume, though, that he was a little smarter and it's a private loan, and that the interest is straight rather than compounded daily.
He'll owe $1300 in interest THE FIRST YEAR. (25000*.052)
The second year, he'll owe .052 * 26300 = 1367.60 + 26300 = 27667.60
Assuming the interest doesn't compound until the end of the year, he pays off 2500 at year 2.5.  27667.60-2500 = 25167.60
<br>
The truth -- interest compounds daily on a student loan.  Compounded daily, the interest on a 25000 loan at 5.2% after 2 and a half years:
28,470.71 total
3,470.71 in interest
His 2500 payment doesn't touch the principal.  It just reduces the interest, which is compounding with the principal.
<br>
Get your first two years at a community college.  Get the grades for an honor society that offers scholarships. (http://ptk.org is one)<br>
Students loans are slavery.