9. Calculating an installment loan payment using the add-on method Calculating the Loan Payment on an Add-On Interest Installment Loan Installment loans allow borrowers to repay the loan with periodic payments over time. They are more common than single-payment loans because it is easier for most people to pay a fixed amount periodically (usually monthly) than budget for paying one big amount in the future. Interest on installment loans may be computed using the simple interest method or the add-on method. The add-on method is a widely used technique for computing interest on installment loans. With the add-on method, interest is calculated by applying the stated interest rate to the balance of the loan. Finance charges using the add-on method are computed using the simple interest formula: F - Amount of Loan x Interest Rate x Term of Loan where F, is the finance charge for the loan, and the term of the loan is in You're borrowing $2,000 for two years with a stated annual interest rate of 4%. Complete the following table. (Note: Round your answers to the nearest dollar) Principal Finance charge $ Total payback $ $2,000 You will make monthly payments throughout the life of the loan, in this case, What will your monthly payments be? Round your answer to the nearest cent. $ months.