Question

What is a good practice before taking out a student loan?
A. Calculate the simple interest on the principal of the loan.
OB. Calculate the annual balloon payment to make sure you will be
able to afford it.
C. Calculate the total amount of compounded interest to see if you
are getting a good deal.
O D. Calculate the monthly payment to make sure you will be able to
afford it.

Answer 1

A typical good practice before taking out a student loan are:

• calculate the annual balloon payment to make sure you will be able to afford it.
• calculate the monthly payment to make sure you will be able to afford it.

What is a student loan?

This is a kind of financial aid in form of money borrowed from the government or a private lender in order to pay for college.

The loan given to the student is expected to be paid back later with the interest that builds up over time and such money gotten are usually used for tuition, room and board, books or other fees.

Hence, the typical good practice before taking out a student loan are calculate the annual balloon payment to make sure you will be able to afford it and the monthly payment to make sure you will be able to afford it.

Therefore, the Option B & D is correct.

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