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Shirley, a recent college graduate, excitedly described to her older sister the $1,550 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 15 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 13 percent interest. Explain why the bank payment and total cost are lower even though the stated interest rate is higher. Click on the table icon to view the MILPF table