00:01
Someone needs to borrow $15 ,000, so that's going to be our principal.
00:05
And the person determined that monthly payments of $275 are affordable.
00:09
So that's going to be our goal.
00:12
The bank offers three situations, a four -year loan, four -year, which means it's 48 payments, at a rate of 6%.
00:25
Then we have a five -year loan, which means there's 60 payments, at 6 .5%, so 0 .065.
00:35
Or a six -year loan, which is 72 payments at 7%.
00:44
Now, i wrote all that out because here's the formula to determine your monthly payment.
00:48
P is your amount of principal.
00:50
So in each one of these cases, let's get a highlighter here, p is going to be 15 ,000.
00:56
J is the monthly interest, so we're going to need to determine what the monthly interest is...