Question

5. Susan receives a Federal Direct Subsidized Loan for $1,000 as a freshman in
college. If the interest rate is 5% per year compounded, how much will she owe upon
graduation?
A. $1,000 plus interest for four years
B. $1,000 plus interest for three years
C. $1,000
D. Nothing

Answer 1

Answer:

c 1,000

Step-by-step explanation:

Answer 2

The amount that Susan will pay upon graduation is; Option C: $1000

In the US, there are two major loans given by the United States department of education for eligible students.

They are;

1. Subsidized Loans
2. Unsubsidized loans

Now, subsidized and unsubsidized loans are federal loans that are given to eligible students to help cover the cost of their higher education at a four-year college or university.

Now, the major difference between both loans is that in subsidized loans, the US department of education usually pays the interest on the loans at maturity while the student pays the original sum alone. However in unsubsidized loans, the student is the one responsible for paying the interest on the loans as at when due in addition to the original amount.

Thus, since the student received a direct subsidized loan of $1000, it means the student will only pay back the $1000.

Read more about subsidized and unsubsidized loans at; https://brainly.com/question/25772915