You want to borrow $1,000 at an interest rate of 10%.The most expensive method of calculating the dollar cost of the interest on this installment loan will be the
A)add-on method.
B)double-declining balance method.
C)discount method.
D)simple interest method.
E)past-due balance method.

Question

Quizplus · Accepted Answer

The add-on method is the most expensive method of calculating the dollar cost of interest because it calculates the interest based on the total amount borrowed, including interest, rather than on the remaining balance of the loan. This results in a higher overall cost of interest.

You Want to Borrow $1,000 at an Interest Rate of 10%.The