A Colorado home sold for $475,000. The buyer financed 80% with a conventional loan at 6.5% annual interest. What is the annual interest on the loan in the first year (simple interest calculation)?
Why $24,700 Is Correct
Answer B: $24,700
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 Colorado Questions
- 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?Real Estate Math
- A Colorado buyer obtains a $280,000 loan at 7% annual interest. What is the monthly interest for the first month (interest-only)?Finance
- A property in Colorado sells for $420,000. The buyer makes a 20% down payment and obtains a conventional mortgage. What is the loan amount?Finance
- A Colorado borrower obtains a $300,000 loan at 6% annual interest, interest only. What is the monthly interest payment?Finance
- What is the maximum loan amount for a conforming conventional loan in most Colorado counties (2024 baseline)?Finance
- A Colorado buyer's loan of $360,000 at 6.5% interest for 30 years has monthly P&I payments of approximately $2,275. How much interest is paid in the first month?Real Estate Math
- A Colorado buyer takes a $400,000 loan at 6% for 30 years. Approximately how much total interest is paid in Year 1?Real Estate Math
- A Colorado buyer purchases a home for $325,000 with a 10% down payment and a 30-year loan at 7.25%. The monthly P&I payment is $1,995. Approximately how much principal is repaid in Year 1?Real Estate Math
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.
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.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Study This Topic
Practice More Colorado Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Colorado Quiz →