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The problem is asking for a comparison between different loan options based on interest rates and terms, specifically looking for the total cost of the subsidized loan.

### To solve this:
- We need to focus on the subsidized loan, which has a **7.3% interest rate** for **10 years**. 
- The **principal amount** is **$70,000**.
- Since payments are deferred and interest is capitalized, this means that interest will accrue during the deferral period and be added to the loan balance.

#### Step-by-step:
1. **Interest Capitalization**: The subsidized loan may accumulate interest over the two years of deferment before graduation. We calculate the total amount after capitalization and for the full loan term.

2. **Loan Growth Formula (Simple Capitalization)**:
   The formula to calculate the future value of a loan with interest is:
   \[
   A = P(1 + rt)
   \]
   where:
   - $ A $ is the amount after interest
   - $ P $ is the principal loan amount (\$70,000)
   - $ r $ is the annual interest rate (7.3% or 0.073)
   - $ t $ is the time in years (10 years)
   
Let's calculate the total cost using this formula.The total cost of the subsidized loan, after 10 years at a 7.3% interest rate, would be **$121,100.00**.

Do you have any questions or want further details about how this calculation was done?

Here are 5 related questions you might explore:
1. How does the interest rate affect the total cost of a loan?
2. What happens if you pay off a loan early? How much would you save in interest?
3. What is the difference between subsidized and unsubsidized loans?
4. How is interest capitalized during deferment?
5. What is the effect of compound interest on loans?

**Tip**: Always make sure to read the loan terms carefully—especially the interest rate and repayment period—as they heavily impact the total cost of borrowing!

If you need to take out a $70,000 student loan 2 years before graduating, which loan option will result in the lowest overall cost to you: a subsidized loan with 7.3% interest for 10 years, a federal unsubsidized loan with 5.9% interest for 10 years, or a private loan with 5.0% interest and a term of 13 years? How much would you save over the other options? All payments are deferred for 6 months after graduation and the interest is capitalized.

This problem involves calculating the total cost of different student loan options with varying interest rates and terms, focusing on interest capitalization and deferred payment conditions. Learn how to compare loans using key interest rate formulas.

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