Real Estate Math

A Florida property is purchased for $560,000. The buyer puts 25% down and obtains a $420,000 mortgage. First year's interest at 5% is what amount of the first year's payments?

A$21,000✓ Correct
B$28,000
C$14,000
D$7,000

Explanation

Annual interest on $420,000 at 5% = $420,000 × 0.05 = $21,000 for the first year (approximate, as slight principal is paid each month).

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