Mathematics

Mike Mcmillan

25 February, 16:06

HALPP! Gad is graduating from college in six months, but he will need a loan in the amount of $8,375 (1

for his last semester. He may either receive an unsubsidized Stafford Loan with an interest rate

of 6.8%, compounded monthly, or his parents may get a PLUS Loan with an interest rate of

7.8%, compounded monthly. The Stafford Loan has a grace period of six months from the time

of graduation. Which loan will have a higher balance at the time of repayment and by how

much?

A. The PLUS Loan has a higher balance by $89.53.

B. The PLUS Loan has a higher balance by $448.35.

C. The Stafford Loan has a higher balance by $564.69.

D. The Stafford Loan has a higher balance by $255.61.