4% Interest Bank Loan
4 Years: 5000 A=5000(1+0.04)^4 A= 5849
3 Years: 5000 A=5000(1+0.04)^3 A= 5624
2 Years: 5000 A=5000(1+0.04)^2 A= 5408
1 Years: 5000 A=5000(1+0.04)^1 A= 5200
_____________________________________________________________________________5849
5624
5408
+ 5200
22,081
A=22081(1+0.04)^8
A=30219
________________________________________________________________________________
A=30219/96
$ 314 per month for 8 years
_________________________________________________________________________________
- Government Subsidized Loans: government pays interest on this loan while the student remains in school, as well as a grace period after graduation. Two of the most common types of these loans are Stafford and Perkins. The criteria for acceptance of this type of loan is determined by the government.
(3.86% interest)
- Government Unsubsidized Loans: Students can choose to make payments while they are still i school, or capitalize the interest until after graduation. It is possible to gain unsubsidized loans from many places but to get the best interest rates students must meet a certain pre-determined criteria presented by loaner
Capitalization: you can skip the interest payments, however you still owe the money and have to pay eventually, when you will pay more because even by capitalizing your loan it continues to grow, which causes higher monthly payments.
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