If the interest rates are the same, a loan using add-on interest will have higher payments and interest charges than a loan using simple interest.

Question

Quizplus · Accepted Answer

This is true because in add-on interest, interest is calculated on the original principal amount for the entire loan period and then added to the principal, which is then divided by the number of payments. This results in higher payments and more interest charges compared to simple interest, where interest is only calculated on the outstanding balance of the loan.

If the Interest Rates Are the Same, a Loan Using