PFIN 5th Edition by Randall Billingsley,Lawrence Gitman,Michael Joehnk

تمرين 5

Calculating and comparing add-on and simple interest loans. Tony Anders is borrowing $10,000 for five years at 7 percent. Payments, which are made on a monthly basis, are determined using the add-on method.
a. How much total interest will Tony pay on the loan if it is held for the full five-year term?
b. What are Tony's monthly payments?
c. How much higher are the monthly payments under the add-on method than under the simple interest method?