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4 4. Loan option # 1: Loan term is flexible, APR 10.75%, the loan amount is open-ended (12 pts)
Although the term for this loan is flexible, your friend would like to pay off the loan in 5 years.
Additionally, the limit of this loan is open-ended, which means she can increase her loan
5 amount as needed; however, your friend only wants to borrow $13,000 (remember she already
has $7,000). Calculate the following based on these criteria.
a. How much should your friend expect to pay monthly on this loan?
b. How many payments will she have to make before this loan is paid off?
c. How much total interest will she pay over the life of this loan?
