The problem you've uploaded involves a 2-year add-on interest loan for $5,360 with an annual interest rate of 9.63%. We need to calculate the total interest she will pay and her monthly payments.

1. Total Interest Paid:

The formula for total interest in an add-on loan is: $\text{Total Interest} = P \times r \times t$ Where:

• $P = 5,360$ (Principal amount),
• $r = 9.63\% = 0.0963$ (Annual interest rate),
• $t = 2$ years (Loan term).

$\text{Total Interest} = 5,360 \times 0.0963 \times 2 = 1,032.048$

Rounding to the nearest cent: $\text{Total Interest} = 1,032.05$

2. Total Amount to Repay:

The total amount to be repaid is the sum of the principal and the total interest: $\text{Total Repayment} = 5,360 + 1,032.05 = 6,392.05$

3. Monthly Payments:

Since the loan is for 2 years, the number of monthly payments is: $\text{Number of Payments} = 2 \times 12 = 24$ The monthly payment is: $\text{Monthly Payment} = \frac{\text{Total Repayment}}{\text{Number of Payments}} = \frac{6,392.05}{24} = 266.3354$

Rounding to the nearest cent: $\text{Monthly Payment} = 266.34$

Final Answers:

• She will pay $1,032.05 in interest.
• Her monthly payments will be $266.34.

Would you like further details or explanations?

Related Questions:

1. How would the interest change if the interest rate were 12% instead of 9.63%?
2. What if the loan term was 3 years? How would the monthly payments change?
3. How would the interest change if the loan amount was $7,000 instead of $5,360?
4. What is the effective annual rate (EAR) for this loan?
5. How would the monthly payment change if the loan was repaid quarterly instead of monthly?

Tip: When calculating interest over multiple years, always ensure you're using the correct time period for accurate results.