1. Shirley, a recent collegegraduate, excitedly described to her older sister the $1,680 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 hercredit-based purchase. Calculate the monthly payments and total cost for a bank loan assuming aone-year repayment period and 15 percent interest.Now, assume the store uses theadd-on method of interest calculation. Calculate the monthly payment and total cost with aone-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.

If the store uses theadd-on method of interestcalculation, the monthly payment with aone-year repayment period and 13 percent interest is $ ____. (Round to the nearestcent.)

2.Which results in a lower total interestcharge, borrowing $630 to be repaid 12 months later as asingle-payment loan or borrowing $630 to be repaid as a12-month installmentloan? Assume a simple interest method of calculation at 11.25 percent interest. Defend your answer.Click on the table icon to view the MILPF table

The amount of interest on thesingle-payment loan is $____.(Round to the nearestcent.)