A Jacksonville investor is analyzing a rental property purchase. The property costs $275,000, and they're obtaining a 30-year loan at 7.25% annual interest with a 75% LTV. If the monthly principal and interest payment is $1,407, what is the first month's interest portion of the payment?
Correct Answer
A) $1,244.69
Correct: Loan amount = $275,000 × 75% = $206,250. First month interest = $206,250 × (7.25% ÷ 12) = $1,244.69. Why not B: This is the total payment, not just interest. Why not C: This would be the principal portion ($1,407 - $1,244.69). Why not D: Incorrectly calculated using wrong interest rate or loan amount.
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