California Real Estate Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Study for the California Real Estate Exam. Engage with multiple choice questions and detailed explanations to sharpen your knowledge. Get ready to ace your real estate career!

Practice this question and more.

What is the first month's interest on a 30 year amortized loan of $250,000 at 7% interest?

$1,458
$1,750
$1,250
$2,000

The correct answer is: $1,458

The correct answer is A. On a 30 year loan of $250,000 with a 7% interest rate, the first month's interest would be $1,458. This is calculated by taking the annual interest rate (7%) and dividing it by 12 (the number of months in a year) to get the monthly interest rate of 0.583%. Then, this monthly interest rate is multiplied by the loan amount of $250,000 to get $1,458. Option B is incorrect because it is based on a monthly interest rate of 0.7%, which is too high. Option C is incorrect because it is based on a monthly interest rate of 0.5%, which is too low. Option D is incorrect because it is based on using the annual interest rate (7%) instead of the monthly interest rate.