Real Estate Math
A buyer obtains a 30-year fixed mortgage of $225,000 at 5.75%. What is the approximate monthly interest for month one?
A$1,078
B$1,078.13✓ Correct
C$967.50
D$1,312.50
Explanation
Monthly interest = Balance × (Rate ÷ 12) = $225,000 × (5.75% ÷ 12) = $225,000 × 0.004792 = $1,078.13. This is the first month's interest portion of the mortgage payment — subsequent months decrease slightly as the balance is reduced by principal payments.
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