Calculating Monthly Loan Payments

Miss Hearne explains how to calculate the regular monthly payment on a loan. The process involves understanding key terms like principal, interest, and finance charge. The principal is calculated by subtracting the down payment from the purchase price. The total amount to be repaid includes the principal and any finance charges. The monthly payment is found by dividing the total repayment amount by the number of monthly payments. In this example, a $4,000 purchase with a $400 down payment and a $270 finance charge results in a monthly payment of $107.50 over 36 months.

What is the main topic discussed in the video?

• How to invest in stocks

• How to budget expenses

• How to calculate monthly loan payments

• How to save money

What is the purchase price of the item in the given problem?

• $4,000

• $270

• $400

• $3,600

What is the down payment in the problem?

• $3,600

• $4,000

• $270

• $400

Which of the following is NOT a term related to loan payments?

• Principal

• Finance Charge

• Interest

• Dividend

How do you calculate the principal amount?

• Add the purchase price and down payment

• Divide the purchase price by the number of payments

• Subtract the down payment from the purchase price

• Multiply the purchase price by the interest rate

What is the principal amount in the problem?

• $4,000

• $270

• $400

• $3,600

What is the first step in calculating the regular monthly payment?

• Add the down payment to the purchase price

• Find the number of payments

• Calculate the principal amount

• Determine the interest rate

How is the total amount to be repaid calculated?

• By subtracting the finance charge from the principal

• By adding the principal and the finance charge

• By dividing the principal by the finance charge

• By multiplying the principal by the number of payments

What is the total amount to be repaid in the problem?

• $3,600

• $4,000

• $3,870

• $270

What is the finance charge in the problem?

• $3,600

• $4,000

• $400

• $270