Real Estate Math

An Idaho property owner has a $220,000 mortgage at 5.5% annual interest (30-year amortization). What is the approximate monthly interest for the first payment?

A$916.67
B$1,008.33✓ Correct
C$1,100.00
D$1,210.00

Explanation

First month's interest = Principal x Annual Rate / 12 = $220,000 x 5.5% / 12 = $220,000 x 0.055 / 12 = $12,100 / 12 = $1,008.33.

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