Real Estate Math

A Kentucky property owner's mortgage payment is $1,650/month of which $1,200 is interest and $450 is principal. The loan balance is $240,000. What is the annual interest rate?

A5%
B5.5%
C6%✓ Correct
D6.5%

Explanation

Monthly interest rate = $1,200 ÷ $240,000 = 0.5%.

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