Which choice represents the best rational approximation for 20 ? A) 2.7 B) 4.5 C) 4.8 D) 5.2
1 answer:
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Answer:
The correct option is B.
Step-by-step explanation:
The formula for amount after compound interest is
Where P is principal, r is rate of interest, n is number of times interest compounded in a period, t is number of years.
It is given that Felix took out an unsubsidized student loan of $40,000 at a 3.6% APR, compounded monthly. The amount after 33 month is
The amount after 33 month is $44156.1074. So, the new principle amount is $44156.1074.
The monthly payment of $44156.1074 for 20 years is
Where, P.V. is present value, r is rate of interest and n is number of times interest compounded.
Therefore the correct option is B.