PFIN 3rd Edition by Lawrence Gitman,Michael Joehnk,Randall Billingsley

Exercise 7

Todd Kowalski 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 Todd pay on the loan if it is held for the full five-year term?
b. What are Todd's monthly payments?
c. How much higher are the monthly payments under the add-on method than under the simple interest method?