Real Estate Math

A Missouri borrower takes out a $200,000 mortgage at 5% annual interest. The first month's interest payment is:

A$833.33✓ Correct
B$1,000.00
C$10,000.00
D$416.67

Explanation

Monthly interest = Principal x Annual Rate / 12 = $200,000 x 0.05 / 12 = $833.33. To solve this, multiply the relevant values: $200,000 at 5%.. The correct answer is $833.33.. This is a common calculation on the Missouri real estate exam.

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