Question

Gary is taking out a $5,000 loan for 1 year at an APR of 12%. His bank has offered him a loan using the add-on method. Using first the financial calculator method and the add-on method calculate Gary's monthly loan payment. Select one: A. $475.00; $448.94 B. $444.24; $466.67

Answer 1

Answer:

Option A. $475.00; $448.94

Explanation:

The loan = $ 5 000

APR = 12 %

therefore, the monthly loan rate will be:

$A = P (1 + \frac{r}{n})^{nt}$

solving with the calculator gives: $475.00 and $448.94