   Chapter 13, Problem 11CR ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

#### Solutions

Chapter
Section ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

# A popular method for calculating the interest on an installment loan is known as_______ interest. (13-5)

To determine

To fill: The blanks provided for the statement, “A popular method for calculating the interest on an installment is known as _____ interest.”

Explanation

Add-On interest is also known as simple interest which is a method of charging interest. Interest amount is added to the amount borrowed and to the principal of the debt. The payment made every time is deducted from the total amount.

The interest can be computed by multiplying the principal amount with the rate of interest and the time for repayment of the loan. The amount of interest that is computed remains constant throughout the entire loan...

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