Question

To purchase a home, a buyer obtained a $42,500 mortgage loan at 9 3/4% interest for 25 years. The mortgage loan closed on June 15; however, at the closing interest was prepaid to the end of the month. Which of the following is true?

Answer 1

Answer: A. $184.17

Step-by-step explanation:

$42,500 x 9.75% = $4,143.75

$4,143.75 ÷360 = $11.51

$11.51 x 16 days = $184.17

A. The buyer paid $184.17 in interest