Real Estate Math
A Kentucky homeowner's annual mortgage interest paid was $14,400 on a loan balance that started at $240,000 at the beginning of the year. What is the approximate annual interest rate?
A5%
B5.5%
C6%✓ Correct
D6.5%
Explanation
Annual interest rate ≈ Annual interest ÷ Loan balance = $14,400 ÷ $240,000 = 6%. Using the values given ($14,400, $240,000), apply the appropriate formula.. The correct answer is 6%.. This is a common calculation on the Kentucky real estate exam.
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