Real Estate Math
What is the mortgage constant (annual debt service ÷ loan amount) for a $400,000 loan with annual payments of $28,000?
A0.060
B0.070✓ Correct
C0.075
D0.080
Explanation
Mortgage constant = Annual debt service ÷ Loan amount = $28,000 ÷ $400,000 = 0.070 = 7%. Using the values given ($400,000, $28,000), apply the appropriate formula.. The correct answer is 0.070.. This is a common calculation on the Indiana real estate exam.
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