A borrower takes a $250,000 mortgage at 5% annual simple interest. What is the first month's interest, rounded to the nearest dollar?
Correct Answer
B) $1,042
First-month interest is $250,000 multiplied by 5% and divided by 12, or $1,041.67, which rounds to $1,042.
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Related Topics & Key Terms
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Key Terms:
Related Concepts
Net Operating Income (NOI) is the revenue a property generates after deducting all operating expenses.
Converting a percentage to a decimal involves dividing the percentage value by 100.
In real estate, property value can be estimated by dividing the Net Operating Income (NOI) by the Capitalization Rate (Cap Rate).
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