Olivia has taken out a $13,100 unsubsidized stafford loan to pay for her college education. she plans to graduate in four years. the loan has a duration of ten years and an interest rate of 7.6%, compounded monthly. by the time olivia graduates, how much greater will the amount of interest capitalized be than the minimum amount that olivia could pay to prevent interest capitalization? round all dollar values to the nearest cent.

The amount of interest capitalized that is greater than the minimum amount that Olivia could pay to prevent interest capitalization is $654.45.

Further Explanation:

Present Value: It is the current value of a future cash flow or streams of cash flow calculated at given a specific rate of return.

Calculate the amount that will be capitalized in four years:

Then the interest:

And interest if it is not capitalized:

The amount that Olivia could pay to prevent interest capitalization:

Therefore, the amount of interest capitalized that is greater than the minimum amount that Olivia could pay to prevent interest capitalization is $654.45.

Learn more:

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Answer details:

Grade: High School

Subject: Financial Management

Chapter: Time value of money

Keywords: Olivia, has, taken, out, $13,100, unsubsidized, Stafford loan, to, pay, for, her, college, education, she, plans, to, graduate, in, four years, the loan, has, a duration, of ten years, and, an, interest rate, of, 7.6%, compounded monthly, by, the time, Olivia, graduates, the greater, will, the amount, of interest, capitalized, be, than the minimum, amount, Olivia, could, pay to prevent, interest, capitalization.

answer; competency based pay;

answerpounds of plastic to purchase 200+60-20=(240);