Massachusetts Real Estate (Math)CORRECT QUESTIONS & ANSWERS(RATED A)
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Course
Massachusetts Real Estate
Institution
Massachusetts Real Estate
Types of Interest - ANSWER Simple- Paid only on the unpaid balance owing.
Compound- Paid on the balance plus the accrued interest.
Add On- Interest is determined for the life of the loan, and then added to the principal.
Discount- Borrower signs a note for the principal and interest combined...
Massachusetts Real Estate (Math)CORRECT
QUESTIONS & ANSWERS(RATED A)
Types of Interest - ANSWER Simple- Paid only on the unpaid balance owing.
Compound- Paid on the balance plus the accrued interest.
Add On- Interest is determined for the life of the loan, and then added to the principal.
Discount- Borrower signs a note for the principal and interest combined but only receives the principal.
You then pay the interest on the full amount of the note.
Rules for Calculating Interest - ANSWER Can be calculated annually, semi annually (1/2 of annual),
quarterly (1/4 of annual), monthly (1/12 of annual), or daily (1/360).
360 days a year and 30 days in a month.
Interest Problem (1) - ANSWER On a loan of $6,000 at 6%, what is the interest due for 3 months and 5
days?
*Interest for 1 year= 6% x $6,000= $360
Interest for 1 month= $360 divide 12= $30
Interest per day= $30 divide 30= $1.00
= $90 + $5= $95
Interest on R.E. Loans (1 of 2) - ANSWER What is the interest due for the first and second months on a
mortgage of $12,000 for 20 years with 6% interest per annul if the principal is paid in equal monthly
installments?
*Principal Payments=$12,000 divide 240 months=$50 a month.
Annual interest on $12,000 @ 6%= .06 x $12,000=$720
Interest on R.E. Loans (2 of 2) - ANSWER Interest for 1 month= $720 divide 12= $60
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