Description: The article is about great lakes login. This is a tutorial on how to calculate the student loan. The author shows the standard formula for calculating the amount of student loan,he also explains the meaning of every section in the formula.
We’ll talk about student loans and in particular the amortization of those loans. The amortization is a way of saying how the loan decreases or what we’re interested in or what is the monthly payment. This formula M equals P times this large quantity I over 1 minus 1 plus I 2 all to the negative n,let’s look at what each of these means.
The M is your monthly payment and you might see that student loans are compounded,let’s look at this monthly because that’s usually what your payments are,this is our monthly payment. The P is your principal,it shows how much your initial amount that you will have to pay back over usually 10 years is,student loans are amortized over 10 years.
This I is unique,this I is the monthly interest rate. I know you are given the annual rate,the monthly rate is the annual or Apr,the annual rate divided by 12,that’s how you get the I,it is the annual rate divided by 12.it’ll be in as a decimal.
N is the number of payments,it’s the number of months,if you’re paying monthly,it is number of months. You can throw everything in there,for example, you have an initial principal into school,you have your initial principal of $14,000,let’s plug in what we have.
We have P equals $14,000,the annual interest rate is 6%,the little I is your monthly rate,this I would be 0.06 and that equals point zero zero five,that’s our little I. For example,that’s going to be 120 months over 10 years,we will plug everything in there.M is what we don’t know,that’s our monthly payment.
P is a principle,that’s $14,000 times I point zero zero five all over one minus,the quantity one plus point zero zero five raised to the negative exponent,negative 120 accounts for the decreasing factor, because amount is taken off every month.
I won’t slow you down with order of operations and show step by step,but you should do exponents first. It is one point zero zero five raised to the negative 120 and then one minus all of that and then one point zero zero five divided by all that,at the end multiply that by 14,000,you get one hundred fifty five dollars and forty three cents every single month for the next ten years.
How much does that come to total? It’s going to be more than the initial fourteen thousand, because you’re renting this money,what you have to do is that total amount that you’ve paid equals the 155 or this M multiplied by the 120,you get eighteen thousand six hundred fifty one dollars and sixty cents,that is the total amount that you pay back.
Maybe you’re thinking that’s more,you’re renting the money,that’s the total interest that you’ve paid over that time,it’s the difference between the 14,000 and the 18651, that’s an interest of four thousand six hundred fifty one dollars and sixty cents,that is the loan amortization of a student loan example.