Question

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?
O A.
$195 000 0.0055 (1+0.0055) 360
(1+0.0055)300 +1
OB.
$195 000 0.0055 (1+0.0055) 360
(1+0.0055) 300-1
O C.
$195 000 0.0055(1-0.0055)300
(1-0.0055) 300-1

Answer 1

Answer:

B

Step-by-step explanation:

Monthly Payment Formula

$\sf PMT=\dfrac{Pi(1+i)^n}{(1+i)^n-1}$

where:

• PMT = monthly payment
• P = loan amount
• i = interest rate per month (in decimal form)
• n = term of the loan (in months)

Given:

• P = $195,000
• i = 6.6% = 0.066
• n = 12 × 30 = 360

$\implies \sf PMT=\dfrac{195000(0.066)(1+0.066)^{360}}{(1+0.066)^{360-1}}$