Question

Sylvia Smith takes out a $85,000 mortgage. She paid 2.2% of the loan amount in closing costs and $7,200.35 in total interest the first year of the loan.

What are Sylvia's closing costs? $
If the APR is (interest for one year plus closing costs) ÷ (amount financed), what was the APR for that year? %
If the APR is (interest only for one year) ÷ (amount financed), what was the APR for that year?

Answer 1

85,000×0.022=1,870
(1,870+7,200.35)÷85,000)*100=10.67%
(7,200.35÷85,000)*100=8.47%