Freehold
Real Estate Math term
The yearly cost of borrowing money expressed as a percentage of the loan principal.
This term belongs to Real Estate Math. The questions below are real items from Freehold's bank that use it - each one cites its source.
Every Freehold question shows why the right answer is right — and cites its source.
A $150,000 interest-only loan carries a 6% annual interest rate. What is the monthly interest payment?
$750 — Annual interest is $150,000 × 0.06 = $9,000. Dividing by 12 months gives a monthly interest payment of $750.
Source: PSI National Real Estate Exam Content Outline §11 Real Estate Calculations
An interest-only loan of $210,000 carries a 4.8% annual interest rate. What is the monthly interest payment?
$840 — Annual interest is $210,000 × 4.8% = $10,080. Dividing by 12 gives a monthly payment of $840.
Source: PSI National Real Estate Exam Content Outline §11 Real Estate Calculations
A $175,000 interest-only loan carries a 5.25% annual interest rate. What is the monthly interest payment?
$765.63 — Annual interest is $175,000 × 5.25% = $9,187.50. Monthly interest is $9,187.50 ÷ 12 = $765.625, which rounds to $765.63.
Source: PSI National Real Estate Exam Content Outline §11 Real Estate Calculations
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