Question

A student is graduating from college in six months but will need a loan in the amount of $2,560 for the last semester. The student receives a PLUS Loan with an interest rate of 7.8%, compounded monthly. What is the balance of the PLUS loan at the time of graduation?

$2,560.00
$2,739.61
$2,648.28
$2,661.48

Answer 1

A = 2560(1 + 0.078/12)^(12*0.5)
A = 2560(1 + 0.0065)^(6)
A ≈ 2560(1.0065)^6
A ≈ 2560(1.0391)
A ≈ 2661.48

Answer 2

great!

Answer 3

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