monthly payments and total cost for a bank loan

Communication
June 29, 2019
Kirk Van​ Houten
June 29, 2019

Shirley, a recent college​ graduate, excitedly described to her older sister the ​$1880 ​sofa, table, and chairs she found today.​ However, when asked she could not tell her sister which interest calculation method was to be used on her​ credit-based purchase. Calculate the monthly payments and total cost for a bank loan assuming a​ one-year repayment period and 13percent interest. Now assume the store uses the​ add-on method of interest calculation. Calculate the monthly payment and total cost with a​ one-year repayment period and 11percent interest. Explain why the bank payment and total cost are lower even though the stated interest rate is higher. The monthly payment for a bank loan assuming​ one-year repayment period and 13 percent interest is ​$______ .

 
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