423.4

4.Let’s say you graduate from the Jedi Academy with $14,400 in student loans. Assume that these loans were disbursed as $300 every month over the previous 4 years. The stated rate of interest on these loans is 6%, compounded monthly. However, as is typical with student loans, the loans did not accrue interest during your schooling (even though you were loaned the first $300 4 years ago, you have not been charged interest on it over the past 4 years. Thus the total amount you owe is only 48 times $300 instead of that amount plus interest).

1. How much did this interest deferral save you? That is, if your regular loans of $300 every month had been earning interest at the stated rate, what total amount would you owe now? (8)
   
2. If you owe $14,400 now and you intend to pay it back in monthly installments over the next 6 years, plus one lump sum of $5000 along with the 72^nd payment, how much will you have to pay per month (assume an interest rate of 6%, compounded monthly)? (8)

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