An unsubsidized Stafford loan is a non-needed loan. The amount of interest capitalized greater than the minimum amount Olivia could pay will be $654.45. Thus, option a is correct.
What is interest capitalization?
Interest capitalization is the addition of the unpaid interest amount to the principal amount of the federal loan taken by the students.
The amount is calculated by, [tex]\rm A = P(1 + \dfrac{r}{n})^{nt}[/tex]
Given,
Initial principal amount (P) = $13,100
Interest rate (r) = 7.6%
The times of the interest applied per time (n) = 12
Time elapsed (t) = 4
Substituting values above:
13100 (1 + 0.076 ÷ 12)⁽⁴⁸⁾ - 13100 = 4636.85
And,
13100 (0.076 ÷ 12) x 4 x 12 = 3982.40
4636.85 - 3982.40 = 654.45
Therefore, $654.45 is the amount that can prevent interest capitalization.
Learn more about interest capitalization here:
https://brainly.com/question/26180433
#SPJ1
