Suzanne and Gavin are taking out installment loans for $1,700 at a stated interest rate...
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Finance
Suzanne and Gavin are taking out installment loans for $1,700 at a stated interest rate of 6%. The term of each loan is five years. Answer the following questions using the repayment information table that follows the questions as necessary. For convenience, the table headings are displayed above the scroll box.
Suzanne
Gavin
Suzannes loan uses simple interest to compute finance charges.
Gavins loan uses the add-on method to compute finance charges.
Suzannes monthly payment rounded to the nearest cent is $
.
Gavins total finance charge rounded to the nearest cent is $
.
Complete the following tables using all interim figures rounded to the nearest cent in your calculations. Enter all figures as positive numbers rounded to the nearest cent. Note that the tables are slightly different to reflect the different methods used for finance charges.
Suzanne Simple
Gavin Add-On
Total payments
$
Principal
$
Principal
$
Finance charge
$
Finance charge
$
Total payments
$
Who paid more for the same loan?
, whose loan used the method to compute finance charges.
Monthly Installment Loan Payments to Repay a $1,000, Simple Interest Loan
Number of Monthly Payments
Rate of Interest
12
24
36
48
60
72
84
5
$85.61
$43.87
$29.97
$23.03
$18.87
$16.10
$14.13
6
$86.07
$44.32
$30.42
$23.49
$19.33
$16.57
$14.61
7
$86.53
$44.77
$30.88
$23.95
$19.80
$17.05
$15.09
8
$86.99
$45.23
$31.34
$24.41
$20.28
$17.53
$15.59
9
$87.45
$45.68
$31.80
$24.88
$20.76
$18.03
$16.09
10
$87.92
$46.14
$32.27
$25.36
$21.25
$18.53
$16.60
11
$88.38
$46.61
$32.74
$25.85
$21.74
$19.03
$17.12
12
$88.85
$47.07
$33.21
$26.33
$22.24
$19.55
$17.65
13
$89.32
$47.54
$33.69
$26.83
$22.75
$20.07
$18.19
14
$89.79
$48.01
$34.18
$27.33
$23.27
$20.61
$18.74
15
$90.26
$48.49
$34.67
$27.83
$23.79
$21.14
$19.27
16
$90.73
$48.96
$35.16
$28.34
$24.32
$21.69
$19.86
17
$91.20
$49.44
$35.65
$28.85
$24.85
$22.25
$20.44
18
$91.68
$49.92
$36.15
$29.37
$25.39
$22.81
$21.02
19
$92.16
$50.41
$36.66
$29.90
$25.94
$23.38
$21.61
20
$92.63
$50.90
$37.16
$30.43
$26.49
$23.95
$22.21
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