To calculate the monthly payments for each option, we can use the formula for monthly mortgage payments:

$M = P \times \frac{r(1 + r)^n}{(1 + r)^n - 1}$

Where:

• $M$ is the monthly payment,
• $P$ is the loan amount (in this case, $98,000),
• $r$ is the monthly interest rate (annual interest rate divided by 12),
• $n$ is the total number of payments (loan term in years multiplied by 12).

Let's calculate the monthly payments for each option:

Option 1: 30-year loan at 6.25% APR

• Loan amount ($P$) = 98,000
• Annual interest rate = 6.25%
• Monthly interest rate ($r$) = $\frac{6.25\%}{12} = 0.0520833\%$
• Loan term = 30 years, so the number of payments ($n$) = 30 × 12 = 360

Option 2: 15-year loan at 5.5% APR

• Loan amount ($P$) = 98,000
• Annual interest rate = 5.5%
• Monthly interest rate ($r$) = $\frac{5.5\%}{12} = 0.0458333\%$
• Loan term = 15 years, so the number of payments ($n$) = 15 × 12 = 180

I'll calculate the monthly payments for both options.The monthly payments for each option are:

• Option 1: 30-year loan at 6.25% APR → $603.40 per month
• Option 2: 15-year loan at 5.5% APR → $800.74 per month

Would you like further details on how these calculations were made, or do you have any questions?

Here are 5 related questions for exploration:

1. What is the total interest paid over the life of each loan?
2. How does a 20-year loan compare to the 15- and 30-year options?
3. How much would you save in total payments by choosing the 15-year loan?
4. What if the APR for the 30-year loan was reduced to 5.5%?
5. How would a different loan amount (e.g., $150,000) affect the monthly payments?

Tip: Shorter loan terms usually have higher monthly payments but lower total interest paid over time.