Question4) Jack is a freshman attending a 4 -year college. He has been approved for an subsidized federal loan at for 10 years. How much will the U.S. Department of Education subsidize in interest costs during the 4.5-year nonpayment period. Use I= Prt.
Studdy Solution
STEP 1
1. Jack has a subsidized federal loan of $8,900.
2. The interest rate is 4.75%.
3. The loan period considered for nonpayment is 4.5 years.
4. The formula to calculate simple interest is \( I = Prt \), where \( I \) is the interest, \( P \) is the principal, \( r \) is the rate, and \( t \) is the time.
STEP 2
1. Identify the principal amount, interest rate, and time period.
2. Convert the interest rate from a percentage to a decimal.
3. Substitute the values into the simple interest formula.
4. Calculate the interest.
STEP 3
Identify the principal amount, interest rate, and time period.
- Principal amount () = \$8,900
- Interest rate (\( r \)) = 4.75%
- Time period (\( t \)) = 4.5 years
STEP 4
Convert the interest rate from a percentage to a decimal.
STEP 5
Substitute the values into the simple interest formula .
STEP 6
Calculate the interest.
The U.S. Department of Education will subsidize \$1,899.38 in interest costs during the 4.5-year nonpayment period (rounded to the nearest cent).
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