This past week in pre calc we studied interest rates. As a class we were told to find interest rates for student loans that were federal government subsidized loans and unsubsidized loans. It was found that federal government subsides loans have an interest rate of 4.5% and unsubsidized loans for undergraduates is 4.5% as well. However, if the loan is for a student working towards their graduate degree the interest rate is 6.0%. As a class we were asked to figure out how long it would take for an individual to fully pay back a $20,000 loan plus interest in 4 years if the individual made monthly payments of either $50,$100,$150, and $200. Here's a table of how long it would take to pay back the loan with varying monthly payments.
This past week in pre calc we studied interest rates. As a class we were told to find interest rates for student loans that were federal government subsidized loans and unsubsidized loans. It was found that federal government subsides loans have an interest rate of 4.5% and unsubsidized loans for undergraduates is 4.5% as well. However, if the loan is for a student working towards their graduate degree the interest rate is 6.0%. As a class we were asked to figure out how long it would take for an individual to fully pay back a $20,000 loan plus interest in 4 years if the individual made monthly payments of either $50,$100,$150, and $200. Here's a table of how long it would take to pay back the loan with varying monthly payments.
The reason all $50 squares in the table is ‘Not Possible’ is because with such a small payment monthly, the rate of interest is greater than the payment so an individual will never be able to pay off the loan.
Change in interest rates affect the overall cost of a loan by making an individual pay more or less money faster in an interval of time which they purchased the loan. The higher the interest rate the more money the individual will need to pay to eventually cover the loan and vice versa.
To be honest, this activity didn't open my eyes to a new perspective on interest rates involving student loans. This is because I learned most of this already my sophomore year of high school when I took AP Macro. From this class I learned interest rates and their effect on consumer monthly payments.
The reason all $50 squares in the table is ‘Not Possible’ is because with such a small payment monthly, the rate of interest is greater than the payment so an individual will never be able to pay off the loan.
Change in interest rates affect the overall cost of a loan by making an individual pay more or less money faster in an interval of time which they purchased the loan. The higher the interest rate the more money the individual will need to pay to eventually cover the loan and vice versa.
To be honest, this activity didn't open my eyes to a new perspective on interest rates involving student loans. This is because I learned most of this already my sophomore year of high school when I took AP Macro. From this class I learned interest rates and their effect on consumer monthly payments.
This past week in pre calc we studied interest rates. As a class we were told to find interest rates for student loans that were federal government subsidized loans and unsubsidized loans. It was found that federal government subsides loans have an interest rate of 4.5% and unsubsidized loans for undergraduates is 4.5% as well. However, if the loan is for a student working towards their graduate degree the interest rate is 6.0%. As a class we were asked to figure out how long it would take for an individual to fully pay back a $20,000 loan plus interest in 4 years if the individual made monthly payments of either $50,$100,$150, and $200. Here's a table of how long it would take to pay back the loan with varying monthly payments.
The reason all $50 squares in the table is ‘Not Possible’ is because with such a small payment monthly, the rate of interest is greater than the payment so an individual will never be able to pay off the loan.
Change in interest rates affect the overall cost of a loan by making an individual pay more or less money faster in an interval of time which they purchased the loan. The higher the interest rate the more money the individual will need to pay to eventually cover the loan and vice versa.
To be honest, this activity didn't open my eyes to a new perspective on interest rates involving student loans. This is because I learned most of this already my sophomore year of high school when I took AP Macro. From this class I learned interest rates and their effect on consumer monthly payments.
The reason all $50 squares in the table is ‘Not Possible’ is because with such a small payment monthly, the rate of interest is greater than the payment so an individual will never be able to pay off the loan.
Change in interest rates affect the overall cost of a loan by making an individual pay more or less money faster in an interval of time which they purchased the loan. The higher the interest rate the more money the individual will need to pay to eventually cover the loan and vice versa.
To be honest, this activity didn't open my eyes to a new perspective on interest rates involving student loans. This is because I learned most of this already my sophomore year of high school when I took AP Macro. From this class I learned interest rates and their effect on consumer monthly payments.