If the add-on method is used to calculate a finance charge of $100.80 on a $1,800 loan,the amount to be ____________.
A)disbursed is $1,900.80
B)disbursed to the borrower is $1,800
C)repaid is $1,699.20
D)repaid to the borrower is $1,800

Question

If the add-on method is used to calculate a finance charge of $100.80 on a $1,800 loan,the amount to be ____________. ​
A)disbursed is $1,900.80
B)disbursed to the borrower is $1,800
C)repaid is $1,699.20
D)repaid to the borrower is $1,800

Quizplus · Accepted Answer

The add-on method calculates the finance charge separately, so the borrower receives the full loan amount of $1,800, and the finance charge is added to the repayment amount.

If the Add-On Method Is Used to Calculate a Finance