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Which of these expressions can be used to calculate the monthly payment for a 30-year loan for $195,000 at 6.6% interest, compounded monthly?

2 Answers

7 votes

Answer:

$195P00*0.0055(1+0.0055)^360

____________________________

(1+0.0055)^360-1

User Sourabh Kumbhar
by
8.3k points
2 votes

Answer:

The correct answer is Monthly payment = [ P * (1 + r/n)ⁿˣ]/nx

Explanation:

Let's calculate the monthly payment for this loan, using the compounded interest formula, this way:

Monthly payment = [ P * (1 + r/n)ⁿˣ]/nx

where P, is the amount of the loan without interests, r is the interest rate, n is the number of times the interest is applied per period and x the number of time periods elapsed.

Replacing with the real values, we have:

P = 195,000

r = 6.6% = 0.066 compounded monthly

n = 12 times the interest rate is applied per year

x = 30 years

Monthly payment = [195,000 * (1 + 0.066/12)³⁶⁰]/360

Monthly payment = $1,404,693.55/360

Monthly payment = $ 3,901.92

The correct answer is Monthly payment = [ P * (1 + r/n)ⁿˣ]/nx

User Lmasneri
by
7.9k points

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