Evaluate loan balance, Corporate Finance

Consider Gavin, a new freshman who has just received a Stafford student loan and started college.  He plans to obtain the maximum loan from Stafford at the beginning of each year.  Although Gavin does not have to make any payments while he is in school, the 7 percent interest owned (compounded monthly) accrues and is added to the balance of the loan.

292_loan balance.png

After graduation, Gavin gets a six-month grace period.  This means that monthly payments are still not required, but interest is still accruing.  After the grace period, the standard repayment plan is to amortize the debt using monthly payments for 10 years.

a) What will be the loan balance when Gavin graduates after his fourth year of college?

b) Using the standard repayment plan and a 7 percent annual interest rate, compute the monthly payments Gavin owes after the grace period.

c)What is the loan balance six months after graduation?

Posted Date: 2/14/2013 6:19:29 AM | Location : United States





I need urgent help on this assinment please help me out!!!!

 

Posted by | Posted Date: 2/14/2013 6:21:42 AM


Related Discussions:- Evaluate loan balance, Assignment Help, Ask Question on Evaluate loan balance, Get Answer, Expert's Help, Evaluate loan balance Discussions

Write discussion on Evaluate loan balance
Your posts are moderated
Related Questions
The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $30, $29, $20, $16, and $12. Five buyers

How is data from the financial sites used to calculate dividends.

how would the use of the concept of value added reduce the problem of agency conflict

An investor buys a French government, 10-year bond, paying annual coupon of 4.5%. Face value = 1000. The investor is unsure of his investment horizon and considers 5 horizons: 5, 6

how to calculate duration of a portfolio by using the average maturity, average coupon rate and average yield of maturity?

What is an agent? What are the responsibilities of an agent? Ans: An agent is someone who has the implied or actual authority to act on behalf of another.  The owners whom the

How does cost of capital vary with debt-to-value ratio?

A promissory note is an instrument in writing (not being a blank or a currency note) containing an unconditional undertaking, signed by the maker, to pay a certain sum of money onl

You have ten million dollars to allocate across two projects, code named 'Wombat' and 'Marmot.' Both projects are somewhat scalable, in that you could potentially invest as much (u

Ask question #Minimum 100 words aapplicability of allocation function of fiscal policy#