Chris Jenkins is borrowing $11,500 for 5 years at 10 percent. Payments are made on a monthly basis, which are determined using the add-on method.How much total interest will Chris pay on the loan if it is held for the full five-year term?What are Chris' monthly payments? Round the answer to the nearest cent.How much higher are the monthly payments under the add-on method than under the simple interest method (determined using a calculator or approximated using Exhibit 7.6)? Round the answer to the nearest cent.

Given Interest rate = 10% Number of years = 5 years Amount of borrowing = $ 11500 Calculation of…

Answered: Chris Jenkins is borrowing $11,500 for…

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 9FPE: Calculating and comparing add-on and simple interest loans. Eli Nelson is borrowing 10,000 for five...

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Chris Jenkins is borrowing $11,500 for 5 years at 10 percent. Payments are made on a monthly basis, which are determined using the add-on method.

How much total interest will Chris pay on the loan if it is held for the full five-year term?
What are Chris' monthly payments? Round the answer to the nearest cent.
How much higher are the monthly payments under the add-on method than under the simple interest method (determined using a calculator or approximated using Exhibit 7.6)? Round the answer to the nearest cent.

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