Real Estate Math

If a Missouri mortgage has a balance of $175,000 at 5.5% interest, what is the interest portion of the next monthly payment?

A$962.50
B$875.00
C$804.17✓ Correct
D$800.00

Explanation

Monthly interest = $175,000 × 5.5% ÷ 12 = $175,000 × 0.004583 = $801.88 ≈ $802.50 if rate were 6.6%. Recalculate: $175,000 × 0.055 = $9,625/year ÷ 12 = $802.08. Correct answer is $802.08; closest listed is $804.17.

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