Calculating Monthly Payments and Finance Charges of Installment Loans

The video tutorial explains how to calculate monthly payments and finance charges for installment loans. It introduces key terms like APR and principal, and demonstrates the calculation process through examples involving a refrigerator, a gazebo, and a vehicle. The tutorial emphasizes the importance of understanding the formula and carefully using parentheses in calculations.

What does APR stand for in financial terms?

• Annual Percentage Rate

• Automated Payment Rate

• Adjusted Peer Rate

• Annual Payment Requirement

How is the monthly interest rate derived from the APR?

• APR plus 12

• APR divided by 12

• APR multiplied by 12

• APR divided by 100

What is the principal amount when calculating monthly payments?

• Monthly payment multiplied by the number of payments

• Total loan amount plus interest

• Initial purchase amount

• Amount after subtracting the down payment

What was the down payment for the refrigerator?

• $150

• $130

• $140

• $139.99

How many payments were made for the refrigerator?

• 10 payments

• 36 payments

• 24 payments

• 12 payments

What was the APR for the gazebo purchase?

• 6%

• 15%

• 12%

• 10%

How much was the total finance charge for the gazebo?

• $517.18

• $500.00

• $600.00

• $450.00

What was the principal amount financed for Lisa's vehicle?

• $50,000

• $40,000

• $45,000

• $35,000

Over how many months was Lisa's vehicle loan spread?

• 72 months

• 60 months

• 36 months

• 48 months

What was the total amount paid back for Lisa's vehicle?

• $47,729.92

• $50,000.00

• $45,000.00

• $40,000.00