Real Estate Math

A buyer obtains a 30-year $200,000 mortgage at 6% annual interest. What is the monthly interest for the first payment?

A$1,000✓ Correct
B$12,000
C$500
D$1,200

Explanation

Monthly interest = Principal x Annual rate / 12 = $200,000 x 6% / 12 = $200,000 x 0.005 = $1,000. This is the interest portion of the first monthly payment.

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