Shirley, a recent college? graduate, excitedly described to her older sister the ?$1,530 ?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 13 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 11 percent interest. Explain why the bank payment and total cost are lower even though the stated interest rate is higher.
The monthly payment for a bank loan assuming? one-year repayment period and 13 percent interest is ?___?
The total cost for a bank loan assuming? one-year repayment period and 13 percent interest is ?___?
If the store uses the? add-on method of interest? calculation, the monthly payment with a? one-year repayment period and 11 percent interest is ?___?
If the store uses the? add-on method of interest? calculation, the total cost with a? one-year repayment period and 11 percent interest is ___?
Explain why the bank payment and total cost are lower even though the stated interest rate is higher.