Real Estate Math

A buyer wants to borrow $240,000 at 7% annual interest on a 30-year mortgage. What is the monthly interest due for the first month?

A$1,120
B$1,400✓ Correct
C$1,680
D$2,800

Explanation

Monthly interest = Loan balance × (annual rate ÷ 12). $240,000 × (0.07 ÷ 12) = $240,000 × 0.005833 = $1,400. This is the interest portion of the first month's payment; the remainder of the monthly payment reduces principal.

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