Real Estate Math
A Texas seller agrees to carry back a $50,000 second mortgage at 8% interest-only for 5 years. What is the monthly payment?
A$333.33✓ Correct
B$1,000
C$416.67
D$500
Explanation
Monthly interest-only payment = Principal × (Annual Rate / 12) = $50,000 × (8% / 12) = $50,000 × 0.006667 = $333.33. At the end of the 5 years, the full $50,000 principal would be due as a balloon payment.
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