Julian Wants to Figure Out How More It Will Cost

question 35

Multiple Choice

Julian wants to figure out how more it will cost monthly to pay off his student loans if he borrows an extra $4000 a year for four years. This will allow him to rent a nicer place and take a holiday each year. Assume that no interest accrues until he completes his education and begins paying off the loan. The interest rate for the loan amount will be seven percent per year compounded monthly and he will pay it off over five years. What would his additional monthly payment be?

• A)$374
• B)$267
• C)$271
• D)$317

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Definitions:

Augmented Matrix

A matrix obtained by appending the columns of two given matrices, typically representing a system of linear equations.

Linear Equations

Equations between two variables that give a straight line when plotted on a graph.

Linear Equations

Equations of the first degree, meaning they involve only first-degree variables (like x) and their coefficients, forming a straight line when graphed.

Interest Rates

The percentage at which interest is paid by borrowers for the use of money that they borrow from a lender.