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PFIN 5th Edition by Randall Billingsley,Lawrence Gitman,Michael Joehnk
Edition 5ISBN: 978-1305661707PFIN 5th Edition by Randall Billingsley,Lawrence Gitman,Michael Joehnk
Edition 5ISBN: 978-1305661707 Exercise 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?
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?
Explanation
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Calculating payments, interest, and APR ...
PFIN 5th Edition by Randall Billingsley,Lawrence Gitman,Michael Joehnk
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