Suppose you want to buy a $140,000 home. You found a bank that offers a 30-year loan at 5.9% APR.
What will be your monthly payment? (Round to the nearest cent.)

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

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

Where:
- $ M $ is the monthly mortgage payment.
- $ P $ is the loan amount (the price of the home), which is \$140,000.
- $ r $ is the monthly interest rate (the annual interest rate divided by 12). Since the APR is 5.9%, the monthly interest rate is:

\[
r = \frac{5.9\%}{12} = \frac{0.059}{12} = 0.00491667
\]

- $ n $ is the total number of payments (for a 30-year loan, the number of payments is 30 years × 12 months = 360 months).

Now, let’s calculate the monthly payment $ M $.Your monthly payment for the $140,000 home, with a 30-year loan at 5.9% APR, will be **$830.39**.

Do you want more details or have any questions?

Here are 5 related questions you might explore:
1. How much total interest will you pay over the life of the loan?
2. What would your payment be if the interest rate were lower, say 4.5%?
3. How would the payment change if you financed for only 15 years instead of 30?
4. What is the difference between APR and the actual interest rate?
5. How does the principal balance change over the course of the loan?

**Tip**: Making extra payments toward your mortgage principal can significantly reduce the interest paid over time.

Suppose you want to buy a $140,000 home. You found a bank that offers a 30-year loan at 5.9% APR. What will be your monthly payment? (Round to the nearest cent.)

Learn how to calculate the monthly payment for a $140,000 home loan with a 30-year term at 5.9% APR. This example demonstrates the use of the fixed-rate mortgage formula and explains key concepts like loan amortization and interest rates. Ideal for high school students in Grades 10-12.

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