The Bender family has been planning a vacation to Europe for the past two years. Tabb Savings agrees to advance a loan of $8,000 to finance the trip provided the Benders pay the loan back in 12 equal monthly installments. Tabb will charge an add-on loan rate of 5.75 percent. How much in interest will the Benders pay under the add-on rate method? What is the amount of each required monthly payment? What is the effective loan rate in this case?
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