Question
John and Mary Stevens are purchasing a tractor and will need a $60,000 loan. The contractual rate is currently 6% with six equal annual payments.
John and Mary Stevens are purchasing a tractor and will need a $60,000 loan. The contractual rate is currently 6% with six equal annual payments. Their lender uses the add-on method of calculating interest.
a. What is the (interest) cost of the loan?
b. What is the total payment (loan plus interest) ?
Step by Step Solution
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Step: 1
a To calculate the interest cost of the loan using the addon method we first need to calculate the t...
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Engineering Economy
Authors: Leland T. Blank, Anthony Tarquin
8th edition
73523439, 73523437, 978-0073523439
