Final answer:
To calculate the first month's interest on a fixed rate loan, multiply the loan amount (which is the home cost multiplied by the LTV ratio) by the interest rate and divide by 12.
Step-by-step explanation:
To calculate the first month's interest on a fixed rate loan, you'll first need to calculate the loan amount. The loan amount can be calculated by multiplying the home cost by the loan-to-value (LTV) ratio. In this case, the home cost is $360,000 and the LTV ratio is 80%, so the loan amount is $360,000 x 0.80 = $288,000.
Next, calculate the monthly interest by multiplying the loan amount by the interest rate and dividing by 12. The interest rate is 7% and the loan amount is $288,000, so the monthly interest is $288,000 x 0.07 / 12 = $1,680.
Therefore, the first month's interest on the fixed rate loan is $1,680.