How much higher are the monthly payments

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Problem - Calculating and comparing add-on and simple interest loans. Eli Nelson is borrowing $10,000 for five years at 7 percent. Payments are made on a monthly basis, which are determined using the add-on method.

Required -

a. How much total interest will Eli pay on the loan if it is held for the full five-year term?

b. What are Eli's monthly payments?

c. How much higher are the monthly payments under the add-on method than under the simple interest method?

Reference no: EM132695913

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