Loan Basics

[nnies]

when you ask for a loan, you're basically borrowing money and you'll have to repay it back later; the amount of money borrowed is called the principle

[jaybrown]

5% of 5, 000 is $250 though, not $150 as the video shows. So it would be $250 x 3 (for the three years) = $750. The total amount you will be paying is $5, 750

[Donald___sn]

Marked by optimism, may your smile never fade.

[hfzxl]

payment per month is $150, 3 year should be $150 * 12 * 3 = $5400, how did you get $5, 395 ?

[jobayerkhan]

hey, you know the music played in this video, does anyone know the name of the music/tune because it's so lovely and very soothing to hear and I wanna listen to it in different variations only idk the name of this music

[nxJapz]

Please I want you to calculate this problem for me.
A man took a personal loan of k3500 over 1 year from the bank to buy furniture.The bank calculate the fortnightly repayment of k145. The application fee is k100. How much in total will he pay the bank and what total interest has been charged?

[ari_analevy]

😊wonderful and clear message do you have it also in Spanish 😮 so I can send it to a friend who doesn’t know English.

[adityaprakash]

why to pay 150 dollars monthly? EMI is about 138.88 interest rate of 6.94 dollars monthly

[kuleranganalukogo]

3 year loan of $5, 000, interest rate=5%, 150+ 150+150=450

[Jaypatel-ylgk]

ChatGPT Calculation for our problem : The calculation of loan payments over a period with a given interest rate isn't straightforward as simply adding a flat percentage. Here’s a detailed breakdown:

### Correct Calculation Using Amortization Formula

When you take a loan, the interest is typically compounded, meaning it's calculated on the remaining principal balance over time. Using the given details:

1. **Principal Amount (P):** $5000
2. **Annual Interest Rate:** 5%
3. **Loan Term:** 3 years

### Step-by-Step Calculation

1. **Monthly Interest Rate (r):**
\[ r = \frac{5\%}{12} = 0.05 / 12 = 0.004167 \]

2. **Total Number of Payments (n):**
\[ n = 3 \times 12 = 36 \]

3. **Monthly Payment Formula:**
\[ M = \frac{P \cdot r \cdot (1 + r)^n}{(1 + r)^n - 1} \]

Plugging in the values:
\[ M = \frac{5000 \cdot 0.004167 \cdot (1 + 0.004167)^{36}}{(1 + 0.004167)^{36} - 1} \]

### Monthly Payment Calculation
\[ M \approx 149.85 \]

4. **Total Amount Paid Over 3 Years:**
\[ \text{Total Amount Paid} = M \times n \]
\[ \text{Total Amount Paid} = 149.85 \times 36 \approx 5394.60 \]

### Conclusion

So, the total amount you would pay over the 3 years is approximately $5394.60, not $5750. This figure represents the principal and the interest calculated and compounded over the term of the loan.