Assignment: Chapter 07 Using Consumer Loans balance. As each payment is made, more or it is allocated to reducing the principal. As the prinapalowed decreases, so too does the interest charged on it Since the payment is always the same each month, the allocation between principal and Interest is always different (more to the principal and less to the interest) 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 original balance of the loan Kyoko and Musashi are taking out installment loans for $3,000 at a stated interest rate of 11%. The term of each loan is seven years. 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 $23.00 $18.87 $16.10 $14.13 $86,07 $44.32 $30.42 $23.49 $19.33 $16.52 $14,61 2 $86.53 $44.77 $30.88 $23.95 $10.00 $17.05 $15.09 8 $86.99 545.23 $31.34 $24.41 $20.28 $17.53 $15.59 ca ta 21.00 249 CO2 100 8 $86.99 $31.34 $24.41 $20.28 $17.53 $15.59 $45.23 $45.68 9 $87.45 $31.80 $24.88 $20.76 $18.03 $16.09 10 $87.92 $46.14 $32.27 $25.36 $21.25 $16.60 $18.53 $19.03 11 $88.38 $46.61 $32.74 $25.85 $17.12 $21.74 $22.24 12 $88.85 $47.07 $33.21 $26.33 $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 Kyoko and Musashi are taking out installment loans for $3,000 at a stated interest rate of 11%. The term of each loan is seve 14 $23.27 $20.61 $18.74 15 $89.79 $90.26 $90.73 $19.27 16 $23.79 $21.14 $24.32 $21.69 $19.86 17 $91.20 $48.01 $34.18 $27.33 $48.49 $34.67 $27.83 $48.96 $35.16 $28.34 $49.44 $35.65 $28.85 $49.92 $36.15 $29.37 $50.41 $36.66 $29.90 $50.90 $37.16 $30.43 $24.85 $22.25 $20.44 18 $91.68 $25.39 $22.81 $21.02 19 $92.16 $25.94 $23.38 $21.61 20 $92.63 $26.49 $23.95 $22.21 Assignment: Chapter 07 Using Consumer Loans Kyoko Kyoko's loan uses simple interest to compute finance charges Kyoko's monthly payment rounded to the nearest centis $ Musashi Musashi's loan uses the add-on method to compute finance charges. Musashi's 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 cont. (Note: The tables are slightly different to reflect the different methods used for finance charges.) Kyoko - Simple Musashi - Add-On Total payments $ Principal $ Principal $ Finance charge 5 Finance charge Total payments $ who paid more for the same loan? Kyoko, whose loan used the simple interest method to compute finance charges O Musashi, whose loan used the simple interest method to compute finance charges Kyoko, whose loan used the add-on method to compute finance charges Musashi, whose loan used the add-on method to compute finance charges