Question

Erica took out a $30,000 student loan with a fixed interest rate to pay for college. Erica did not make payments on her loan for a period of 9 years. After this time period interest had accrued, resulting in the loan balance increasing to $59,000. a. What is is the 9-year growth factor for the amount that Erica owes on the loan? Preview b. What is the 9-year percent change for the amount that Erica owes on the loan? % Preview c. What is is the 1-year growth factor for the amount that Erica owes on the loan? Preview d. What is the 1-year percent change for the amount that Erica owes on the loan? Preview

Answer 1

(8) the initial amount taken as loan = $30,000 Loan banance affer 9 years = $ $9,000 1 interest rate is fixed. amount after a years (Compounded annually) - ab* = 30000 bg => 30000 (6)9 39000 .:: 19 = $480p - (2) a 3008 g year growth factor is 1(bºs se or 1.9667 (b) colith 9 year percentage change to (1.9667-1) X100% = 96.67% ] the amount increased by to the amount becocom 10 96.67%. om 196.67% (b)P = of initial amount offers Seso tho g en (b) = n(59) (taking log both side) - Inb= 0.67634 -) emba 0.075148836 70 a 20.075148896 I takeng anti log cach side) b = 1.07804 → one year growth factor (d) The amount (loan) increase every year by 11.07804-1)x100% = 7.804% l amount after one year is = 107.804% of initial) amount,