What is the monthly payment for a loan amount of $100,000 over 15 years at an interest rate of 6%?

To determine the monthly payment for a loan using a fixed-rate mortgage calculation, the formula that is typically applied is known as the loan amortization formula. The formula calculates the monthly payment based on the loan amount (principal), interest rate, and the number of payments (months).

For a loan of $100,000 at an interest rate of 6% over 15 years, the monthly interest rate is found by dividing the annual interest rate by 12. Thus, the monthly interest rate would be 0.06 / 12 = 0.005.

Next, the total number of payments (months) would be 15 years multiplied by 12 months per year, resulting in 180 total monthly payments.

Substituting these numbers into the loan amortization formula provides a calculation of the monthly payment. The formula is as follows:

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

Where:

• M = monthly payment
• P = principal amount ($100,000)
• r = monthly interest rate (0.005)
• n = number of payments (180)

Plugging in the values into the formula yields:

[ M = 100000 \frac