Gov. Unsubsidized: government does not give you a loan; does not pay interest in college.
A bank loan could be as much as 6.8%
Steps to calculating:
1. 20,000= the 5,000$ each year for four years
2. Add 1
3. Divide the rate of interest (0.0466) by the number of times per year, interest is compounded (1).
4. Raise everything in the parenthesis to the power of 20.
5. A= 20,000(1+0.0466)^20=49,732$
6. Figure out how many months are in 20 years
7. 49,732$/ 240 months= 207.00$ per month
College Loans: Federal and state government, colleges and private organizations.