Real Estate Math

An Alaska investment property costs $600,000. The investor pays 25% down and finances the rest at a 7.5% annual interest rate (interest only for the first year). What is the first-year annual interest payment?

A$30,375
B$33,750✓ Correct
C$38,250
D$45,000

Explanation

Loan = $600,000 × 75% = $450,000. Annual interest (interest-only) = $450,000 × 7.

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