Real Estate Math
A North Dakota buyer puts 5% down on a $320,000 home and is required to pay PMI at 0.5% annually on the loan balance. What is the annual PMI cost in the first year?
A$1,280
B$1,440
C$1,520✓ Correct
D$1,600
Explanation
Loan amount = $320,000 × 95% = $304,000. Annual PMI = $304,000 × 0.5% = $304,000 × 0.005 = $1,520. To solve this, multiply the relevant values: $320,000 at 5%.. The correct answer is $1,520.. This is a common calculation on the North Dakota real estate exam.
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