Question: CAICULATING AND COM PARING ADD-ON AND SIM PIE INTEREST LOANS. Ed Pierce is borrowing $10,000 for five years at 7 percent. Payments, which are made

CAICULATING AND COM PARING ADD-ON AND SIM PIE INTEREST LOANS. Ed Pierce is borrowing $10,000 for five years at 7 percent. Payments, which are made on a monthly basis, are determined using the add-on method.

a. How much total interest will Ed pay on the loan if it is held for the full five-year term?

b. What are Ed's monthly payments? . How much higher are the monthly payments under the add-on method than under the simple interest method? LO1

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