Gilbert is graduating from college in one year, but he will need a loan in the amount of $5,125 for his last two semesters. He may either receive an unsubsidized Stafford Loan with an interest rate of 6.8%, compounded monthly, or his parents may get a PLUS Loan with an interest rate of 7.8%, compounded monthly. The Stafford Loan has a grace period of six months from the time of graduation. Which loan will have a higher balance at the time of repayment and by how much?

Question

anonymous · Answer

The Stafford Loan has a higher balance by $134.35.
The Stafford Loan has a higher balance by $274.36.
The PLUS Loan has a higher balance by $54.79.
The PLUS Loan has a higher balance by $85.22.

anonymous · Answer

Stafford: $ 5,673.71
PLUS:      $ 5,539.36
-> ....

anonymous · Answer

so it's A!!!! YAYAYAY!!

anonymous · Answer

Thank you so so much!! :) I've been stuck on those questions forrrevverrr until you came along.

anonymous · Answer

Thanks. I have to go; dinner's been ready for an hour already and I'm starving... lol. Thanks again.. :)

anonymous · Answer

You need the scientific calculator to store all the results, the round off won't lead to exact hundredth digit !