Weighted average cost of the three loans

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You have just earned your MBA and have three student loan balances outstanding. They all mature in 5 years. The Amounts owed and the associated interest rates are shown in the table below. You can also combine these loans ($64,000) into a consolidated loan from the bank at a rate of 7.2% annual interest for a period of 5 years. Should you consolidate these or stay with the three seperate loans? Hint: Weighted average cost of the three loans vs. the consolidated bank loan @7.2%.

Loan 1--Balance Due: $20,000--Annual interest rate 6%

Loan 2--Balance Due: $12,000--Annual Interest rate 9%

Loan 3--Balance Due: $32,000--Annual Interest rate 5%

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Reference no: EM13769376

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