Real Estate Math

A South Dakota buyer obtains a $200,000 mortgage at 5% interest. What is the monthly interest for the first month?

A$625
B$833.33✓ Correct
C$1,000
D$1,250

Explanation

Monthly interest = Principal × Annual Rate ÷ 12 = $200,000 × 5% ÷ 12 = $200,000 × 0.05 ÷ 12 = $10,000 ÷ 12 = $833.33.

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