To calculate the monthly payment for a 25-year fixed-rate mortgage for $140,000 at 6.5%, we can use the formula for the fixed monthly payment of a mortgage loan, which is:
P = (Pv * r) / (1 - (1 + r)^(-n))
Where:
Pv = the present value (or principal) of the loan
r = the monthly interest rate
n = the total number of monthly payments over the life of the loan
P = the fixed monthly payment
First, we need to calculate the monthly interest rate by dividing the annual interest rate (6.5%) by 12 months:
r = 6.5% / 12 = 0.00541667
Next, we need to calculate the total number of monthly payments over the life of the loan by multiplying the number of years by 12:
n = 25 years * 12 months/year = 300 months
Now we can substitute these values into the formula:
P = (140,000 * 0.00541667) / (1 - (1 + 0.00541667)^(-300))
Simplifying this equation, we get:
P = $859.35
Therefore, the monthly payment for a 25-year fixed-rate mortgage for $140,000 at 6.5% is $859.35.