Homework SourseYou have a student loan that is 35000 that begins to accumul
You have a student loan that is $35,000 that begins to accumulate interest in May 2017 (when you graduate… hopefully!). The interest rate on this loan is 5.0% per year. a) Show the balance equation for your loan. b) How much do I need to pay PER MONTH in order for the principal on this loan to be CONSTANT, ie. Pay the same amount forever? c) How much do I need to pay PER MONTH in order to pay off the loan by May 2032?
Solution
Please find below the complete calculation of loan amount of $35000. The balance equation is explained below. The calculation is done on year basis.
Also the Per Month amount will be $280.99.
Below is the table :-
| Years | Beginning Balance | Interest | Principal Amount | Ending Balance |
| May 2017-18 | $35,000.00 | $1,790.67 | $1,607.85 | $33,392.15 |
| May 2018-19 | $33,392.15 | $1,708.41 | $1,690.11 | $31,702.04 |
| May 2019-20 | $31,702.04 | $1,621.94 | $1,776.58 | $29,925.47 |
| May 2020-21 | $29,925.47 | $1,531.04 | $1,867.47 | $28,058.00 |
| May 2021-22 | $28,058.00 | $1,435.50 | $1,963.01 | $26,094.98 |
| May 2022-23 | $26,094.98 | $1,335.07 | $2,063.45 | $24,031.54 |
| May 2023-24 | $24,031.54 | $1,229.50 | $2,169.02 | $21,862.52 |
| May 2024-25 | $21,862.52 | $1,118.53 | $2,279.99 | $19,582.54 |
| May 2025-26 | $19,582.54 | $1,001.88 | $2,396.63 | $17,185.90 |
| May 2026-27 | $17,185.90 | $879.26 | $2,519.25 | $14,666.65 |
| May 2027-28 | $14,666.65 | $750.37 | $2,648.14 | $12,018.51 |
| May 2028-29 | $12,018.51 | $614.89 | $2,783.62 | $9,234.88 |
| May 2029-30 | $9,234.88 | $472.47 | $2,926.04 | $6,308.84 |
| May 2030-31 | $6,308.84 | $322.77 | $3,075.74 | $3,233.10 |
| May 2031-2032 | $3,233.10 | $165.41 | $3,233.10 | $0.00 |
