Calculate the monthly payment and total cost

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?Shirley, a recent college? graduate, excitedly described to her older sister the ?$1,900 ?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 14.5 percent 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 12.5 percent interest. Explain why the bank payment and total cost are lower even though the stated interest rate is higher

Reference no: EM133019478

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