Real Estate Math
A North Dakota buyer pays $420,000 for a property. They put 20% down and their monthly mortgage payment (P&I) is $1,680. What is the annual interest rate (approximate) on the 30-year loan? (Hint: LTV=80%)
A3.5%
B4%✓ Correct
C4.5%
D5%
Explanation
Loan = $420,000 × 80% = $336,000. Monthly factor = $1,680 / ($336,000/1,000) = $1,680/336 = $5.00/1,000 = approximately 4% for 30 years.
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