Subsidized and unsubsidized loans are federal student loans for eligible students to help cover the cost of higher education at a four-year college or university, community college, or trade, career, or technical school. However, there is a difference in the two. The difference is that direct subsidized loans have slightly better terms to help out students with financial need. In order to solve the sample problem. "Assume you took out a $5000 loan for each of your 4 years of college (5000 your freshman year, 5000 your sophomore year, 5000 your junior year, and 5000 your senior year). To make your life a little easier, let’s assume they are government subsidized loans. If you plan to pay it back over the next 20 years, how much will you have to pay per month?" you would need to use this equation:
A=20,000(1+0.04660^20=$49,732
$49,732/240 months=$2,017 per month
A=20,000(1+0.04660^20=$49,732
$49,732/240 months=$2,017 per month