Math Problem Statement
Decreasing the number of years of a loan decreases the amount of interest repaid over the term of the loan. Suppose a dental hygienist has the option of a 30year loan or a 25year loan of $365,000 at an annual interest rate of 5.25%.
(a)
Calculate the monthly payment (in dollars) for each loan. (Round your answers to the nearest cent.)
Solution
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Math Problem Analysis
Mathematical Concepts
Loan Amortization
Interest Rates
Time Value of Money
Algebra
Formulas
M = \frac{P \cdot r \cdot (1 + r)^n}{(1 + r)^n  1}
r = \frac{annual\_interest\_rate}{12}
n = years \times 12
Theorems

Suitable Grade Level
College Level / Advanced High School
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