Seth Had Accumulated Canada Student Loans Totalling $5,200 by the Time

question 63

Short Answer

Seth had accumulated Canada Student Loans totalling $5,200 by the time he graduated from Mount Royal College in May. He arranged with the Bank of Nova Scotia to select the floating-rate option (at prime plus 2½%) and to begin monthly payments of $110 on December 31. Prepare a loan repayment schedule up to and including the February 28 payment. The prime rate was initially at 3.25%. It dropped by 0.25% effective January 31. Seth made an additional principal payment of $300 on February 14.

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Definitions:

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated as the net profit over the cost of investment.

Contribution Margin

Revenues less variable costs.

Discretionary Expenses

Non-essential spending or expenses that can be reduced or eliminated without impacting the fundamental living standard.

Net Income

The total profit remaining after all expenses, taxes, and deductions have been subtracted from total revenue.