Real Estate Math
A South Dakota investor buys a property for $500,000 with a $100,000 down payment. At a 7% annual interest rate, what is the first year's interest on a interest-only loan?
A$7,000
B$28,000✓ Correct
C$35,000
D$50,000
Explanation
Loan amount = $500,000 − $100,000 = $400,000. Annual interest = $400,000 × 7% = $28,000.
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