Real Estate Math

A loan has a monthly payment of $1,750 and the current balance is $230,000 at 7.5% annual interest. How much of the first payment is interest?

A$1,200.00
B$1,312.50
C$1,437.50✓ Correct
D$1,481.25

Explanation

Monthly interest = $230,000 x (7.5% / 12) = $230,000 x 0.00625 = $1,437.50. To solve this, multiply the relevant values: $1,750 and $230,000 at 7.5%.. The correct answer is $1,437.50.. This is a common calculation on the North Carolina real estate exam.

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