Loan Repayment Calculations and Concepts

The video tutorial explains the transition from yearly to monthly calculations for loan repayments. It covers the necessary adjustments in interest rates and the application of series in calculating repayments. The tutorial also discusses the importance of rounding in repayment strategies and concludes with final calculations and considerations for loan repayment plans.

Why is it necessary to adjust calculations when changing from yearly to monthly?

• To avoid using integration

• To ensure accuracy in calculations

• To make the numbers smaller

• To simplify the process

How is the monthly interest rate derived from an annual rate?

• By subtracting 12 from the annual rate

• By adding 12 to the annual rate

• By dividing the annual rate by 12

• By multiplying the annual rate by 12

What is the purpose of setting up a series in repayment calculations?

• To calculate the total interest

• To determine the number of payments

• To adjust the interest rate

• To find the monthly repayment amount

Why is it important to round up the monthly repayment amount?

• To make calculations easier

• To ensure the loan is fully repaid

• To reduce the total interest paid

• To avoid overpaying the loan

What happens if the monthly repayment is rounded down?

• The loan will be repaid faster

• The interest rate will increase

• The total repayment amount will decrease

• The borrower will owe a small amount at the end

How does rounding affect the total repayment over the life of the loan?

• It doubles the total repayment

• It decreases the total repayment

• It increases the total repayment slightly

• It has no effect

What is the impact of a small rounding difference over the life of a loan?

• It results in a minor difference

• It can lead to significant savings

• It causes the loan to be unpaid

• It has no impact

In the hypothetical scenario, what is Johnny's main concern?

• The interest rate is too high

• The loan term is too short

• The monthly repayment is too low

• The savings are not significant enough

What does Johnny consider when deciding on a repayment plan?

• The loan term

• The amount he can borrow

• The total interest paid

• The monthly repayment amount

What is the final question Johnny needs to answer?

• What is the best interest rate?

• How much can he borrow and repay in time?

• How much interest will he pay?

• How long will it take to repay the loan?