Gizmonic Institute Corp. needs to take out a one$-$year bank loan of $$400,000$ and has been offered several different terms. One bank

has offered a loan with $11\%$ simple interest that requires monthly payments. The loan principal will be paid back at the end of the year.

Based on a $360-$day year, what will be the monthly payment for June? $($Hint: Remember that June has $30$ days.$)$

$$3,850\mathrm{.}00$

$$3,116\mathrm{.}67$

$$3,666\mathrm{.}67$

$$4,033\mathrm{.}34$

Another bank has offered $8\%$ add$-$on interest to be repaid in $12$ equal monthly installments. What is the monthly payment on this add$-$on interest

loan?

$$37,800\mathrm{.}00$

$$39,600\mathrm{.}00$

$$36,000\mathrm{.}00$

$$30,600\mathrm{.}00$

Choose the answer that best evaluates the following statement:

Industrialization Automation Co$.$ needs to borrow $$10,000,000.$ The company has been offered both simple interest and add$-$on interest loans. The

add$-$on interest loan has a significantly lower interest rate than the simple interest loan.

The company needs to evaluate more factors than just the interest rate before deciding which type of loan it should accept.

The company should accept the add$-$on interest loan, because it will be paying less money in interest due to the lower interest rate.