How much is the monthly payment factor for a 30-year fixed mortgage loan of $250,000 at 7%?

To find the monthly payment factor for a 30-year fixed mortgage loan at a specific interest rate, the formula used is derived from the standard loan amortization process. The monthly payment factor can help determine the monthly payment amount based on the loan amount and interest rate.

For a mortgage loan amount of $250,000 at an interest rate of 7% for 30 years, you would first convert the interest rate from an annual to a monthly rate by dividing by 12 (the number of months in a year). The annual rate of 7% is 0.07, so the monthly rate is 0.07 / 12 = 0.0058333.

Next, using the loan amortization formula, you can calculate the monthly payment based on this interest rate and the total number of payments, which for a 30-year mortgage is 30 * 12 = 360 payments.

Applying this to the formula for calculating the monthly payment will yield a monthly payment factor. The outcome of this calculation determines the monthly payment needed to repay the mortgage, including principal and interest, over the loan term.

In this question, the correct answer, representing the monthly payment factor, is approximately 0.0045713. This factor shows