Real Estate Math
A Louisiana commercial property sold for $875,000. The buyer paid 25% down and financed the balance. What was the loan amount, and what is the LTV ratio?
A$656,250 loan; 75% LTV✓ Correct
B$218,750 loan; 25% LTV
C$700,000 loan; 80% LTV
D$612,500 loan; 70% LTV
Explanation
Down payment: $875,000 × 25% = $218,750. Loan amount: $875,000 − $218,750 = $656,250. LTV: $656,250 ÷ $875,000 = 75%.
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