Barry Wood wants to buy a used car that costs $4,000. He has two possible loans in mind. One loan is through the car dealer; it is a three-year add-on interest loan at 6% and requires a down payment of $300. The second is through his credit union; it is a three-year simple interest amortized loan at 9.5% and requires a 10% down payment. (Round your answers to the nearest cent.) (a) Find the monthly payment for each loan. dealer     $  credit union     $  (b) Find the total interest paid for each loan. dealer     $  credit union     $  (c) Which loan should Barry choose? Why? He should choose the car dealer add-on interest loan because he pays less interest.He should choose the credit union simple interest loan because he pays less interest.

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Loans

A loan is a term that we are all familiar with. The processing of loans is one of the most important functions of a bank. It keeps our economy stable and facilitates the implementation of monetary policies. Let's take a look at the different forms of loans and get some answers to some common questions.