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# LOC accumulated interest?

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Does anyone know the difference between the total amount of accumulated interest it will cost to carry LOC if monthly interest is paid, as opposed to not paying any monthly interest? (let's make the interest rate at 4.50% for both cases (?!) and 30K/year for 4 years.

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I'm confused. If you had the money to pay the interest of the LOC, why would you need the LOC in the first place? Where would you be getting the money to pay the interest? Most students just add it to the LOC.

compounded interest 35.78 + 34.23 + 32.76 + 31.35 = 134.12

no interest = 120k over 4 years

yearly interest payments would be 1.35 + 2.7 + 4.05 + 5.4 = 13.5k

so...I think you save 400 bucks by paying the interest (but I don't know where you get the money for that interest payment).

I hope my calculations were correct.

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Family will pay for the monthly interest; but if you are right about the \$400 difference, I'd probably just add it to the LOC. However, with the interest accumulating and compounding, every month, \$400 does not seem right, does it?

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