00:01
The interest we have on a loan has an annual rate, so i'm going to write this down.
00:05
Annual rate of 12%, and we have a term of five years.
00:23
This is five years, and the loan is for $2 ,490.
00:34
$2 ,490.
00:35
Okay, and so let's use the add -on method for determining the interest.
00:42
So first of all, this is going to be total interest.
00:47
Total interest is the $2 ,490 times the 12 % is 0 .12 times two years.
01:02
This is $597 .60.
01:09
So next we have the monthly emi.
01:15
This is equal to the $2 ,490 plus total interest, $597 .60, divided by the total number of months.
01:33
So that's 12 months in a year for two years, 24 months.
01:38
This equals $128 .65.
01:44
And see the monthly principal.
01:51
The monthly principal is going to be the $2 ,490 over 24 months.
02:03
This is $103 .75.
02:09
And then we have the amount of interest.
02:14
This is going to be equal to the emi minus principal...