Real Estate Math
A Colorado home has a $280,000 loan at 5% annual interest. The first monthly payment is entirely interest only. What is the first month's interest payment?
A$1,050
B$1,167✓ Correct
C$1,400
D$14,000
Explanation
Monthly interest = $280,000 × 5% ÷ 12 = $280,000 × 0.004167 = $1,166.67 ≈ $1,167. To solve this, multiply the relevant values: $280,000 at 5%.. The correct answer is $1,167.. This is a common calculation on the Colorado real estate exam.
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