Ch 07: Assignment-Using Consumer Loans Comparing Loan Payaients Using the Simple-Interest and Add-On Methods of Interest Computation Installment loons aliow borrowers to tepoy the loan with periodic poyments over time, They are more common than single-payment loans because if is easier for most people to gay a fixed amount periodically (usually monthly) than busget for paying one big amount in the future. Interest on. instaliment loans may be computed ising the simple interest method or the add-on method. For an instaliment loan using simple interest and equal payments throughout the life of the ioan, interestls charged only on the outstanding baiance. As each payment is made, more of is is allocated to reducing the princlpal. As the principal owed decreases, so too does the interest charged on it. Since the payment is always the same each month, the allocation between prineipal 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 losn. Felix and Lamy are taking out installment loans for $3,000 at a stated interest rate of 11 W. The term of each loan is seven years. Answer the fallowing questians arsing the preceding repayment information table as necesstry: Compiete 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: The tables are singhty different to neflect the different methods ised for finance charges.) Who paid more for the same loan? Felix, whose loon used the add-on method to compute finance charges Larry. whose loan used the simple interest method to compute finance charges Felix, whose loar used the simple interest method to compute finance charges Ch 07: Assignment-Using Consumer Loans Comparing Loan Payaients Using the Simple-Interest and Add-On Methods of Interest Computation Installment loons aliow borrowers to tepoy the loan with periodic poyments over time, They are more common than single-payment loans because if is easier for most people to gay a fixed amount periodically (usually monthly) than busget for paying one big amount in the future. Interest on. instaliment loans may be computed ising the simple interest method or the add-on method. For an instaliment loan using simple interest and equal payments throughout the life of the ioan, interestls charged only on the outstanding baiance. As each payment is made, more of is is allocated to reducing the princlpal. As the principal owed decreases, so too does the interest charged on it. Since the payment is always the same each month, the allocation between prineipal 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 losn. Felix and Lamy are taking out installment loans for $3,000 at a stated interest rate of 11 W. The term of each loan is seven years. Answer the fallowing questians arsing the preceding repayment information table as necesstry: Compiete 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: The tables are singhty different to neflect the different methods ised for finance charges.) Who paid more for the same loan? Felix, whose loon used the add-on method to compute finance charges Larry. whose loan used the simple interest method to compute finance charges Felix, whose loar used the simple interest method to compute finance charges