Kate took out a subsidized Stafford loan worth $9,710 to pay for college. The interest rate on the loan was 5.9%, compounded monthly. It took Kate 5 years to pay off the loan after graduation. What portion of the total amount she paid represented the interest?

For a loan paid off in equal monthly installments, the monthly payment is about $187.27 using a principal of $9,710, a monthly rate of 0.059 ÷ 12, and 60 payments. Kate paid about 60 × $187.27 = $11,236.22 altogether. Subtracting the original loan amount, $11,236.22 − $9,710 = $1,526.22 in interest, so the correct choice is $1,526.22.

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