Homework Answers
Add on Interest- it is a method of computing interest on installment loans.
Formula of Add on Interest method
I= P*R*T
In the above Question,
Principal = $1700 Time=5 years rate of Interest= 6% p.a
Interest= 1700 * 5 * 6% = $510
Total amount to be repaid = Principal + Interest
= 1700 + 510 = $2210
Time = 5 years
Monthly installments = 5 * 12 = 60 months
Monthly installment on Total amount = $2210/ 60 = $36.83 0r $37 (approx)
Montly installment on Interest = $ 510/ 60 = $8.5 or $9
Add Answer to:
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