Final answer:
The monthly payment for a $20,000, three-year, 10-percent loan with the interest calculated using the add-on method would be $722.22.
Step-by-step explanation:
To calculate the monthly payment for a $20,000, three-year, 10-percent loan using the add-on method, we need to first calculate the total interest charged on the loan. We can do this by multiplying the loan amount ($20,000) by the interest rate (10%) and the loan term (3 years). The total interest is $6,000. To find the total amount that needs to be repaid, we add the loan amount and the total interest, giving us $26,000.
Next, we divide the total amount by the number of months in the loan term (36), to get the monthly payment. In this case, the monthly payment for the $20,000, three-year, 10-percent loan with the interest calculated using the add-on method would be $722.22.