Financial Math - How to Calculate Loan Balance After 20 Payments (Grade 12 Tutorial) скачать в хорошем качестве

Financial Math - How to Calculate Loan Balance After 20 Payments (Grade 12 Tutorial)

Welcome to Mathenatic! In this video, we dive into a financial mathematics problem where Kevin takes out a loan of 131,500.34 Rand and repays it with monthly payments of 3,000 Rand over 6 years. The interest rate is 18% per annum, compounded monthly. The goal of this question is to calculate the balance outstanding after the 20th payment. There are two methods typically used to solve this kind of problem: one involves bringing the loan amounts back using the present value formula (P), while the other takes the payments forward using the future value annuity formula (F). In this video, we prefer using the future value annuity method, as it avoids dealing with complicated decimal payments and unnecessary calculations involving logarithms. By taking the payments forward, we ensure that the "n" value remains a whole number, simplifying the process. Kevin’s loan of 131,500.34 Rand earns compound interest over time. As he makes monthly payments, part of each payment goes toward the interest, and the rest pays down the loan principal. To calculate the balance outstanding after 20 payments, we use the future value annuity formula, which incorporates both the interest and principal payments. The total interest charged on the loan is based on the 131,500.34 Rand principal at 18% annual interest, compounded monthly, over 20 payments. The future value annuity calculation gives us the total amount Kevin has paid in interest and capital after 20 payments. After subtracting the total payments made from the accumulated interest, we find the outstanding balance on the loan at that point in time, which amounts to 107,218.62 Rand. This approach helps simplify the process of calculating loan balances and avoids common pitfalls related to using logarithmic formulas for solving for "n." By taking the loan payments forward, we ensure the calculation is straightforward and the results are easier to understand. Download Math Study Notes at https://payhip.com/MatheNatic Get started with FREE notes on Statistics and Financial Math! Subscribe to MatheNatic for more High School Mathematics Tutorials:    / @mathenatic   #MatheNatic