Loan Payment Calculations

The video tutorial explains how to calculate the monthly payment and total interest for a $27,000 car loan with an 8.2% interest rate over four years. It uses a loan formula to determine the monthly payment and demonstrates the calculation process using a calculator. The tutorial also covers how to compute the total interest paid over the loan period by multiplying the monthly payment by the number of months and subtracting the loan amount.

What is the total loan amount for the car purchase?

• $28,500

• $25,000

• $27,000

• $30,000

What is the annual interest rate offered by the company?

• 7.5%

• 8.2%

• 8.5%

• 9.0%

In the loan formula, what does 'n' represent?

• Loan amount

• Annual interest rate

• Number of compounds per year

• Length of the loan in years

How many payments will be made over the four-year loan period?

• 36

• 48

• 60

• 24

What is the monthly payment calculated for the car loan?

• $670.00

• $661.69

• $650.50

• $680.25

What is the first step in calculating the monthly payment using the loan formula?

• Evaluate the quotient in the formula

• Subtract the loan amount

• Determine the total interest

• Multiply by the number of months

How do you calculate the total amount of payments made over the loan period?

• Divide the loan amount by the interest rate

• Subtract the interest from the loan amount

• Multiply the monthly payment by the number of months

• Add the loan amount to the interest

What is the total interest paid over the four-year loan period?

• $4,500.00

• $4,800.00

• $4,761.12

• $5,000.00

What is the final step in determining the total interest paid?

• Add the loan amount to the total payments

• Subtract the loan amount from the total payments

• Multiply the interest rate by the loan amount

• Divide the total payments by the number of months

What is the purpose of calculating the total interest paid?

• To calculate the number of payments

• To understand the cost of borrowing

• To determine the total loan amount

• To find out the monthly payment