Interest rates is the proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding. They depend on many factors such as income, you can earn by lending money, of bond pricing and of the amount you will have to pay to borrow money, it is important that you understand how prevailing interest rates change: primarily by the forces of supply and demand, which are also affected by inflation. The average interest rate is 3.75%. Interest rates also vary by the type of loan.
If I took a loan of $5000 per year over 4 years. My loan will total $20,000. In order to figure out how long it will take pay it back after college, I used to formula A=P(1+rt). If I wanted to pay my loan off in 10 years, I would need to spend $200.12 a month. By the end of these 4 years I would have payed an interest rate of $4,014.70. The longer you take back to pay a loan, the money you will pay based on interest rate.