Real Estate MathLoan_and_interest_calculationsHARD
A borrower pays $4,500 in total interest for the first year on an interest-only loan. If the annual interest rate is 4.5%, what is the loan amount?
Correct Answer
A) $100,000
Step 1: For an interest-only loan, annual interest = Loan amount × Rate. Step 2: Loan amount = Annual interest ÷ Rate = $4,500 ÷ 0.045 = $100,000.
Answer Options
A
$100,000B
$20,250C
$450,000D
$1,000,000Why This Is the Correct Answer
Sign up free to unlock full analysis
Why the Other Options Are Wrong
Sign up free to unlock full analysis
Deep Analysis of This Real Estate Math Question
Sign up free to unlock full analysis
Background Knowledge for Real Estate Math
Sign up free to unlock full analysis
Sign up free to unlock full analysis
Real World Application in Real Estate Math
Sign up free to unlock full analysis
Related Topics & Key Terms
Key Terms:
loan_and_interest_calculationsinterestreverse_calculationfinancing_math
Was this explanation helpful?
More Real Estate Math Questions
Find the annual GRM for a 4-unit building in Detroit Michigan with an asking price of $300,000 and gross annual rents of $25,000.
A property has annual property taxes of $3,600. The seller paid taxes through December 31, but the sale closes on October 1. How much does the seller owe the buyer as a proration?
The buyer gets a $280,000 mortgage in Florida. The intangible tax is:
A property sells for $350,000 in Florida. The documentary stamp tax on the deed is:
What is the interest rate on a $200,000 loan requiring an annual interest payment of $8,000?
- → A rectangular lot measures 105 feet by 110 feet. What is the lot area in square feet?
- → A property's value is $150,000 today. What was the original cost if it lost 25% of value over ten years?
- → Jane learns that a lakefront property sold for $700,000 with 400 feet of lake frontage. About how much per front foot?
- → A property is assessed at $250,000. The tax rate is $2.50 per $100. What is the annual tax?
- → A triangular lot has a base of 200 feet and a height of 150 feet. What is the area of the lot?
- → A property sells for $325,000. If the commission is 6%, split equally between listing and selling brokers, what does each broker receive?
- → A property's value is $91,000 today. What was the original cost if it lost 35% of value over five years?
- → A buyer takes a $250,000 mortgage in Florida. What is the intangible tax?
- → A home you listed sells for $400,000. Your broker receives 6% and you receive 45% of their check. How much do you receive?
- → A property's value is $150,000 today. What was the original cost if it lost 25% of value over ten years?