Real Estate Math
A Louisiana investor finances $240,000 at 5% annual interest. After the first year's payments, the loan balance has been reduced by $5,000 in principal. The amount paid in interest during the first year was approximately:
A$11,000
B$12,000✓ Correct
C$10,000
D$9,500
Explanation
First year interest ≈ $240,000 × 5% = $12,000 (approximately, since each payment slightly reduces the balance). The first year's interest payment is approximately $12,000.
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