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22 July, 18:37

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?

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  1. 22 July, 18:48
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    Answer: A. $184.17

    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
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