Question

What is the interest rate in a mortgage that requires an interest payment of $1,500 made every 3 months on a $50,000 loan?

A)
12%
B)
3%
C)
6%
D)
9%

Answer 1

The interest rate in the mortgage is 3%.

Step-by-step explanation:

To calculate the interest rate in a mortgage, we need to use the formula:

Interest payment = Loan amount × Interest rate

Given:

• Interest payment = $1,500
• Loan amount = $50,000
• Payments are made every 3 months

Let's solve for the interest rate:

Interest payment = Loan amount × Interest rate

$1,500 = $50,000 × Interest rate

Interest rate = $1,500 / $50,000

Interest rate = 0.03

Converting to a percentage: 0.03 × 100 = 3%

Therefore, the interest rate in the mortgage is 3% (option B).