Reference no: EM132863341

Problem - Inderveer Kaur entered Canada from India in January 2010 as an international student to pursue a Diploma in Information Technology (IT) at Pures College of Technology in Toronto, Ontario. In 2013 she obtained permanent residence (PR) status and became eligible for Canada Student Loan (CSL), which she used to finance her Bachelor's degree program in IT at York University (YU). By the time she completed her studies at YU in December 2015, she was owing TD Bank $25,400 under the CLS scheme. TD offered her the fixed rate (prime +1.8%). She agreed to make monthly payments of $200 beginning July 31, 2016 as she had by then secured a job as a Network Administrator. She made no payment during the 6-month grace period (GP) which began on January 1, 2016. The Prime Rate at the beginning of the GP was 5.5%. It increased by 0.8% effective April 1, 2016. On July 1 2016, the prime rate went down by 0.4%. On August 16 2016, the prime rate rose again by 0.8%.

Required -

a) Calculate all the interest that accrued (at prime +1.8%) during the six-month grace period.

b) Calculate the loan balance at the end of the grace period.

c) Calculate the loan balance at the end of the end of July after the first payment.

d) Calculate the loan balance at the end of August after the second payment.