What would the monthly payment on a 177650 loan at a 5% and 6% interest rate

To calculate the monthly payment on a loan, we use the formula for a fixed-rate mortgage:

\[
M = \frac{P \cdot r \cdot (1 + r)^n}{(1 + r)^n - 1}
\]

Where:
- $M$ is the monthly payment.
- $P$ is the loan principal (177,650 in this case).
- $r$ is the monthly interest rate (annual rate divided by 12).
- $n$ is the total number of payments (loan term in months).

To calculate the monthly payment at both 5% and 6% interest rates, let's assume a 30-year term (360 months):

1. **For 5% interest rate**:
   - Annual rate = 5%, so monthly rate $ r = \frac{5}{100 \times 12} = 0.004167 $.
   - $n = 30 \times 12 = 360$ months.

2. **For 6% interest rate**:
   - Annual rate = 6%, so monthly rate $ r = \frac{6}{100 \times 12} = 0.005 $.
   - $n = 360$ months.

Now, I will calculate the monthly payment for both cases.The monthly payments for a loan of $177,650 over 30 years would be:

- **At a 5% interest rate**: $953.66
- **At a 6% interest rate**: $1,065.10

Would you like any further details or have any questions?

Here are 5 related questions to expand your understanding:
1. How would the monthly payment change if the loan term were shorter, like 15 years?
2. What would be the total interest paid over the life of the loan at each rate?
3. How does the monthly payment change with a higher loan amount, say $200,000?
4. What is the effect of making extra payments on this loan?
5. How does the interest rate impact the amortization schedule?

**Tip**: Even small differences in interest rates can lead to significant savings over the life of a loan. It's always worth negotiating the best possible rate!

What would the monthly payment on a 177650 loan at a 5% and 6% interest rate?

Learn how to calculate monthly payments on a $177,650 loan at 5% and 6% interest over a 30-year term. Discover the formula for loan amortization and how interest rates affect the monthly payment. Suitable for students in Grades 10-12 and anyone interested in personal finance.

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