Oklahoma Broker Practice Exam 2026 – Complete Guide to Preparing

To determine the difference in monthly payments between a 15-year loan at 5% and a 30-year loan at 6% for a $140,000 mortgage, we need to calculate the monthly payment for each scenario using the mortgage payment formula. The formula for the monthly mortgage payment \( M \) can be expressed as:

\[

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

\]

where:

- \( P \) is the principal loan amount,

- \( r \) is the monthly interest rate (annual rate / 12),

- \( n \) is the total number of payments (loan term in months).

**For the 15-year loan at 5%:**

- Principal \( P = 140,000 \)

- Annual interest rate = 5%, so monthly interest rate \( r = \frac{5\%}{12} = 0.004167 \)

- Number of payments \( n = 15 \times 12 = 180 \)

Plugging in the values:

\[

M_{15} = 140,000 \times \frac{0.004167(1 + 0.004167