A buyer's loan amount is $240,000 at 5.5% annual interest. What is the monthly interest portion of the first payment?
Why $1,100 Is Correct
Answer A: $1,100
Exam Tip: Real Estate Math
Math questions are formula-based. Memorize the key formulas: commission splits, proration, cap rate (NOI ÷ Value), GRM (Price ÷ Gross Rent), and LTV (Loan ÷ Value). Practice converting between annual and monthly figures.
People Also Study
Related Alabama Questions
- A buyer obtains a $200,000 loan at 6% annual interest. What is the first month's interest payment?Real Estate Math
- An Alabama buyer qualifies for a $250,000 loan with a monthly payment of $1,500. What is the annual debt service?Finance
- A borrower takes out a $200,000 mortgage at 6% annual interest. What is the monthly interest payment in the first month?Finance
- A mortgage of $150,000 at 7% annual interest has a monthly payment of $998. How much of the first payment is principal?Real Estate Math
- A $250,000 loan at 5% annual interest has a monthly payment of $1,342. How much of the first payment goes to interest?Real Estate Math
- A buyer takes out a $240,000 mortgage at 6.5% annual interest. What is the first month's interest payment?Real Estate Math
- In Alabama, which type of loan has an interest rate that changes periodically based on a market index?Finance
- A buyer obtains a $250,000 mortgage at 6% annual interest. What is the first month's interest charge?Finance
Key Terms to Know
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Study This Topic
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →