Question

the simple interest formula is ( a = p(1 + rt) ).
over the course of four years, a student borrows ( $48,000 ) to pay their tuition. the loan has an annual interest rate of ( 4.5% ) with deferred interest, meaning interest on the principal does not begin accruing until the student graduates. after graduation, the student plans to pay off the loan in 8 years.
how much will they pay in total over the life of the loan?
( $60,600 )
( $65,280 )
( $73,920 )
( $78,640 )

Explanation:

Step1: Identify the values of \(P\), \(r\), and \(t\)

Given \(P = 48000\), \(r=0.045\) (since \(4.5\%= 0.045\)), and \(t = 8\) (the time after graduation when the loan is paid off).

Step2: Substitute into the simple - interest formula \(A=P(1 + rt)\)

$$
LATEXBLOCK0
$$

Step3: Calculate the value of \(A\)

\(48000\times1.36=65280\)

Answer:

\(\$65,280\)