Precalculus Part 1, Unit 4 Assignment: Application of an Exponential Function - Compound Interest
1. What is the original loan amount, i.e. how much were the total costs for tuition plus room & board for
the four years that Penny attended the college?
2. What is the new loan amount after the one-year grace period (remember that interest will accrue on
the loan during this initial 12-month period that she is not paying anything back on the loan)? This is
the amount that she will be responsible for paying back.
3. Given that she can pay back the loan in full after 10 years of payments, what is the total amount she
will end up paying back (both principal and interest that has accrued over the 10 years)? And how
much will her monthly payments on the loan be for those 10 years?