What is the monthly payment on a 15-year loan of $175,000 if the annual interest rate is 9.9%? Use the regular monthly payment formula or the table as appropriate.

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Quizplus · Accepted Answer

To calculate the monthly payment on a 15-year loan of $175,000 with an annual interest rate of 9.9%, we use the loan payment formula: $PMT = P \times \frac{r(1+r)^n}{(1+r)^n - 1}$, where $P$ is the principal amount ($175,000), $r$ is the monthly interest rate (annual rate divided by 12 months, so 9.9% / 12 = 0.825% or 0.00825 as a decimal), and $n$ is the total number of payments (15 years \times 12 months = 180 payments).Plugging in the values: $PMT = 175,000 \times \frac{0.00825(1+0.00825)^{180}}{(1+0.00825)^{180} - 1}$This calculation results in a monthly payment of approximately $1,869.87, which matches option C.

What Is the Monthly Payment on a 15-Year Loan of $175,000