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heatherlambert2
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Alyssa may apply for an unsubsidized Stafford Loan with an interest rate of 6.8%, compounded monthly and a grace period of six months from the time of graduation. Or, Alyssa may have her parents apply for a PLUS Loan with an interest rate of 7.8%, compounded monthly. She will be graduating from college in a year and a half and needs a loan in the amount of $11,895. Which loan is the better choice and why?
 one year ago
 one year ago
heatherlambert2 Group Title
Alyssa may apply for an unsubsidized Stafford Loan with an interest rate of 6.8%, compounded monthly and a grace period of six months from the time of graduation. Or, Alyssa may have her parents apply for a PLUS Loan with an interest rate of 7.8%, compounded monthly. She will be graduating from college in a year and a half and needs a loan in the amount of $11,895. Which loan is the better choice and why?
 one year ago
 one year ago

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heatherlambert2 Group TitleBest ResponseYou've already chosen the best response.0
The Stafford Loan is the better choice because it is $197.81 cheaper than the PLUS Loan. The PLUS Loan is the better choice because it is $256.32 cheaper than the Stafford Loan. The PLUS Loan is the better choice because it is $454.13 cheaper than the Stafford Loan. The Stafford Loan is the better choice because it is $273.50 cheaper than the PLUS Loan.
 one year ago

heatherlambert2 Group TitleBest ResponseYou've already chosen the best response.0
@ajprincess @AravindG @Alyx_da_Boss @Anyssah @alahrichi1 @A.kumar
 one year ago

A.kumar Group TitleBest ResponseYou've already chosen the best response.0
use ur own brain
 one year ago

heatherlambert2 Group TitleBest ResponseYou've already chosen the best response.0
I tried. Give me a formula and I can do it. I can't find the formula.
 one year ago

mathmate Group TitleBest ResponseYou've already chosen the best response.0
Amount after n months, compounded monthly A=P(1+r/12)^n r=interest rate per annum P=principal (borrowed amount) n=number of months money was borrowed. Calculate the amount to be repaid for each option and make your choice accordingly.
 one year ago

A.kumar Group TitleBest ResponseYou've already chosen the best response.0
pi=prt/100
 one year ago

heatherlambert2 Group TitleBest ResponseYou've already chosen the best response.0
@mathmate what would n be? i put 18, but i don't think that's right.
 one year ago

mathmate Group TitleBest ResponseYou've already chosen the best response.0
I am not too sure if the "grace period" is just an extended repay period where interest continues to grow. If you calculate it for n=18, you would get one of the answers. And for n=24, you would get another answer. The answer depends on when she is ready to repay (completely), 18 or 24 months. Make a choice.
 one year ago

heatherlambert2 Group TitleBest ResponseYou've already chosen the best response.0
Grace period is the months where interest isn't charged. Like a credit card.
 one year ago

heatherlambert2 Group TitleBest ResponseYou've already chosen the best response.0
I'm not getting the right answer. I'll just pick a random answer.
 one year ago

mathmate Group TitleBest ResponseYou've already chosen the best response.0
If that's the interpretation, then PLUS loan will charge (higher) interest for 24 months while the Stafford loan charges (lower) interest for 18 months. The difference comes to be $727.64, which is not one of the answers.
 one year ago

Anyssah Group TitleBest ResponseYou've already chosen the best response.1
The Stafford Loan is the better choice because it is $197.81 cheaper than the PLUS Loan.
 one year ago
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