Real Estate Math
A Wyoming investor borrows $600,000 at 7.5% interest-only for 2 years on a commercial property. What is the total interest paid over the 2-year term?
A$45,000
B$90,000✓ Correct
C$135,000
D$180,000
Explanation
Annual interest = $600,000 x 7.5% = $45,000. Total over 2 years = $45,000 x 2 = $90,000. On an interest-only loan, all payments are interest and the principal balance remains at $600,000 at the end of the term.
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