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The problem in the image is asking to calculate the monthly repayment amount for a loan, using amortization over time.

### Given:
- Loan amount: $ P = 352,000 $
- Annual interest rate: $ r = 2\% $ (or 0.02)
- Loan duration: 25 years
- Monthly payments
- Interest is compounded monthly.

### Formula to use:
For loans with equal payments, the monthly payment $ M $ is calculated using the amortization formula:
\[
M = P \times \frac{r(1+r)^n}{(1+r)^n - 1}
\]
Where:
- $ P $ is the principal (loan amount).
- $ r $ is the monthly interest rate (annual rate divided by 12).
- $ n $ is the total number of payments (loan term in years multiplied by 12).

### Steps:
1. Convert the annual interest rate to a monthly rate: 
   \[
   r_{\text{monthly}} = \frac{0.02}{12}
   \]
2. Determine the total number of payments:
   \[
   n = 25 \times 12
   \]
3. Use the amortization formula to calculate the monthly repayment.

Let's calculate it.The size of each monthly repayment is approximately **$1,491.97**.

Would you like further details or have any questions about this calculation?

Here are 5 related questions for expanding your understanding:
1. How does the loan term (number of years) affect the monthly payment?
2. What happens to the monthly payment if the interest rate increases?
3. How does an interest-only mortgage differ from an amortized mortgage like this one?
4. What are the effects of making extra payments on the mortgage principal?
5. How would the payment change if the loan amount increased to $400,000?

**Tip:** Always compare different loan terms (e.g., 15 years vs. 30 years) to find the best balance between monthly payments and total interest paid.

The Flemings secured a bank loan of $352,000 to help finance the purchase of a house. The bank charges interest at a rate of 2% per year on the unpaid balance, and interest computations are made at the end of each month. The Flemings have agreed to repay the loan in equal monthly installments over 25 years. What should be the size of each repayment if the loan is to be amortized at the end of the term?

Calculate the monthly repayment for a $352,000 loan amortized over 25 years with a 2% annual interest rate, compounded monthly. Learn about the loan amortization formula and how time value of money affects monthly payments.

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