General Mortgage KnowledgeQuestion 107 of 400
A loan has a current balance of $200,000 at a 6.00% annual interest rate. How much of the next monthly payment goes to interest?
a.$12,000
b.$500
c.$1,000
d.$1,200
Explanation
Monthly interest = balance x (annual rate / 12) = $200,000 x (0.06/12) = $200,000 x 0.005 = $1,000. $12,000 is the full year's interest, not one month.
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