Solve the problem.
-You need a $87,168 loan. Compute the monthly payment for each of the loan options listed below. Assume that the loans are fixed rate. Option 1: a 30 year-loan at an APR of $8 \%$
Option 2: a 15-year loan at 7.5\%

Question

Quizplus · Accepted Answer

The monthly payment for each loan option can be calculated using the formula for a fixed-rate mortgage. The formula is $M = P\frac{r(1+r)^n}{(1+r)^n - 1}$, where $M$ is the monthly payment, $P$ is the loan principal, $r$ is the monthly interest rate (annual rate divided by 12), and $n$ is the total number of payments (loan term in years multiplied by 12). For Option 1, $P = \$87,168$, $r = \frac{8\%}{12} = 0.0066667$, and $n = 30 \times 12 = 360$. Plugging these values into the formula gives a monthly payment of approximately \$639.61. For Option 2, $P = \$87,168$, $r = \frac{7.5\%}{12} = 0.00625$, and $n = 15 \times 12 = 180$. This results in a monthly payment of approximately \$808.06.

Solve the Problem 8%8 \%8% Option 2: a 15-Year Loan at 7

Solve the Problem $8 \%$ Option 2: a 15-Year Loan at 7