Timothy Lawrence plans to borrow $5,000 and to repay it in 36 monthly installments. This loan is being made at an annual add-on interest rate of 11.5 percent.   Calculate the finance charge on this loan, assuming that the only component of the finance charge is interest. Round the answer to the nearest cent. $   Use your finding in part (a) to calculate the monthly payment on the loan. Round the answer to the nearest cent. $   per month Using a financial calculator, determine the APR on this loan. Round the answer to 2 decimal places. %

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A: Given information,Amount: Number of years:  YearsAnnual rate: To calculate,Monthly payment

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A: Using excel PMT function to calculate monthly payment.

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A: Annual payment refers to the payment that is made each year including interest and principal for…

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A: Formulas:

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A: Effective interest rate is interest rate considering effect of compounding.

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Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.