SOLUTION: I need to compare interest rates to find the best one, but I am unsure of the formula to use. For example (1)25 year loan for $390000 with interest 7.4004% compounded monthly (2)

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Question 438249: I need to compare interest rates to find the best one, but I am unsure of the formula to use.
For example (1)25 year loan for $390000 with interest 7.4004% compounded monthly
(2) 30 year loan for $390000 with interest 6.76% compounded weekly
(3)20 year loan $390000 with interest 7.2% compounded quartely
Any help would be much appreciated
Answer by stanbon(75887) About Me  (Show Source):
You can put this solution on YOUR website!
I need to compare interest rates to find the best one, but I am unsure of the formula to use.
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monthly payment = (rP)/[1-(1+r)^(-N)
r is period interest rate
P is amt. borrowed
N = total # of periodic payments
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For example
(1)25 year loan for $390000 with interest 7.4004% compounded monthly
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mp = [(0.074004/12)*390000)/[1-(1+(0.07004/12))^(-25*12) = $2913.49
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(2) 30 year loan for $390000 with interest 6.76% compounded weekly
weekly payment = [(0.0676/52)*390000]/[1-(1+(0.0676/52))^(-52*30) = $583.95
So monthly payment would be (52/12)(583.95) = $2530.44
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(3)20 year loan $390000 with interest 7.2% compounded quartely
Quarterly payment = [(0.072/4)*(390000)]/[1-(1+(0.072/4))^(-4*20) = $9236.62
Monthly payment = (4/12)(9236.62) = $3078.87
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Cheers,
Stan H.
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