Below is the formula for calculating monthly payments for a fixed-rate loan.
M=P (i (1+i) ^nt / (1+i) ^nt - 1)
Part 1: Explain what the following variables represent and how changing each one affects the monthly payment amount: P, i and t.
Part 2: Explain how changing each variable (P, i and t) affects the total cost of principal and interest over the life of the loan.
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Home » Mathematics » Below is the formula for calculating monthly payments for a fixed-rate loan. M=P (i (1+i) ^nt / (1+i) ^nt - 1) Part 1: Explain what the following variables represent and how changing each one affects the monthly payment amount: P, i and t.