During Four Years of College, Nolan MacGregor's Student Loans Are

question 57

Multiple Choice

During four years of college, Nolan MacGregor's student loans are $3,900, $4,400, $3,900, and $3,700 for freshman year through senior year, respectively. Each loan amount gathers interest of annual rate of 1%, compounded quarterly while Nolan is in school; and an annual rate of 3%, compounded quarterly during a 6-month grace period after graduation. Assume the freshman year loan earns an annual rate of 1% interest for year during the first year, then for 3 full years until graduation. Make similar assumptions for the loans for the other years. After the grace period, the loan is amortized over the next 10 years at an annual rate of 3%, compounded quarterly. Suppose Nolan decides to pay an additional $90 above the calculated quarterly payment, how much will Nolan save by paying the extra $90 with each payment? Round your answer to the nearest cent. ​

• A)$4,084.39
• B)$2,084.39
• C)$1,284.39
• D)$37,865.32
• E)$484.39

---

Definitions:

Balance Sheet

A financial report that provides a snapshot of a company's financial position by listing its assets, liabilities, and equity at a particular point.

Outstanding Voting Stock

The total shares of a corporation's stock that are currently owned by shareholders, including those with voting rights.

Long-Term Investment

Investments held for an extended period, typically longer than one year, to achieve sustained growth or income.

Net Income

The profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.