Real Estate Math

A loan of $200,000 at 6% annual interest is interest-only for the first year. What are the total interest payments in the first year?

A$10,000
B$12,000✓ Correct
C$14,400
D$24,000

Explanation

Annual interest = $200,000 × 6% = $12,000. Monthly = $1,000. Total first year = $12,000. To solve this, multiply the relevant values: $200,000 at 6%.. The correct answer is $12,000.. This is a common calculation on the Alaska real estate exam.

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