Question

Compute the Monthly Interest payment.

We Purchased a House for $450,000 on a 7 Year Interest Only Mortgage Loan Note Payable with an Interest Rate of 7%.
Enter your answer as a Number Only, No Decimals, No Commas, or Dollar Signs, round to the nearest Dollar if needed.

Answer 1

To compute the monthly interest payment on a 7-year interest-only mortgage loan note payable with an interest rate of 7%, multiply the loan amount by the annual interest rate and divide by 12. The monthly interest payment is $2,625.

Step-by-step explanation:

To compute the monthly interest payment on a 7-year interest-only mortgage loan note payable with an interest rate of 7%, we need to first calculate the loan amount. Since it is an interest-only loan, the loan amount is the same as the purchase price of the house, which is $450,000.

Then, we can calculate the monthly interest payment using the formula: Interest Payment = Loan Amount * Annual Interest Rate / 12.

Plugging in the values, the monthly interest payment is $450,000 * 7% / 12 = $2,625.