Question
Shudent Loan-
State School - Borrow
att
interest rate
How much do you end up paying for the loan if you just pay the minimum each morth?
State School - Borrow
How much do you end up paying for the loan if you just pay the minimum each morth?
Ask by Macdonald Hobbs. in the United States
Jan 24,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
If you make the minimum monthly payments over 10 years for a $40,000 student loan at a 4% interest rate, you’ll pay a total of approximately $48,619.20, which includes about $8,619.20 in interest.
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Bonus Knowledge
When it comes to student loans, the total amount you’ll end up paying can soar, especially if you’re just making the minimum monthly payments. With a
loan at a
interest rate and assuming a standard 10-year repayment plan, you’d pay approximately
in total — that’s
in interest alone. However, if you stick to just the minimum payments, you might stretch the repayment period out much longer, leading to a much higher total paid over time!
A common scenario for borrowers is that they underestimate how many years it can take to pay off a loan when only making minimum payments. Here’s a little tip: try to make extra payments whenever possible! Even a small, additional amount can significantly reduce the total years spent in repayment and save you some serious cash in interest. It’s a great way to take control of your financial future!