Using the simple interest method, find the monthly payments on a $3,000 installment loan if the funds are borrowed for 24 months at an annual interest rate of 8%. How much interest will be paid during the first year of this loan? (Use a monthly payment analysis similar to the one in Exhibit 7.6.)

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Exhibit 7.6 Monthly Payment Analysis for a Simple Interest Installment Loan (Assumes a $1,000, 8%, 12-Month Loan) Part of each monthly payment on an installment loan goes to interest and part to principal. As the loan is paid down over time, less and less of each payment goes to interest and more and more goes to principal. Interest Charges 234568 S Outstanding Loan Balance at Beginning of Month Month 1 (1) $1,000.00 919.68 838.82 757.42 Monthly Payment (2) Principal [(1) x 0.00667] [(2)-(3)] (3) (4) 675.49 $ EA EA EA LA EA 86.99 $ 6.67 80.32 $ 86.99 6.13 80.86 $ 86.99 5.59 81.40 $ 86.99 5.05 81.94 86.99 4.50 82.49 593.00 $ 86.99 3.95 83.03 7 509.97 $ 86.99 3.40 83.59 426.38 $ 86.99 2.84 84.15 9 342.23 $ 86.99 2.28 84.71 10 257.52 $ 86.99 1.72 85.27 11 172.25 $ 86.99 1.15 85.84 12 86.41 $ 86.99 0.58 86.41 Total $1,043.88 $43.88 $1,000.00 Note: Column-1 values for months 2 through 12 are obtained by subtracting the principal payment shown in column 4 for the preceding month from the outstanding loan balance shown in column 1 for the preceding month; thus, $1,000-$80.32 $919.68, which is the outstanding loan balance at the beginning of month 2.