The table shows the terms of a fixed-rate mortgage. A 2-column table has 4 rows. The first column is labeled Component with entries (P) Principal, (R) Monthly interest rate, (n) Total number of monthly payments (30-year term), (M) Monthly payment. The second column is labeled Cost with entries 200,000 dollars, 0.4 percent, 350, 1059 dollars and 85 cents. Which formula should be used to correctly calculate the monthly mortgage payment? M = P StartFraction Left-bracket R (1 minus R) Superscript n Baseline Right-bracket Over (1 + R) Superscript n Baseline EndFraction M = P StartFraction Left-bracket R (1 + R) Superscript n Baseline Right-Bracket Over Left-bracket (1 + R) Superscript n Baseline minus 1 Right-bracket EndFraction M = P StartFraction R Over left-bracket (1 + R) Superscript n Baseline minus 1 Right-bracket EndFraction M = P StartFraction Left-bracket R (1 + R) Superscript n Baseline Right-Bracket Over (N + R) EndFraction
Answer The formula to correctly calculate the monthly mortgage payment is: M = P StartFraction Left-bracket R (1 + R) Superscript n Baseline Right-Bracket Over Left-bracket (1 + R) Superscript n Baseline minus 1 Right-bracket EndFraction. Components of the Formula