Question

A house sold for $350,000. The buyer made a 20% down payment. Monthly interest on the loan was $1,400. What was the interest rate on the loan?

Answer 1

Answer:

the rate of interest will be 6%

Step-by-step explanation:

House sold for = $350,000

buyer made down payment of = 20 %

Monthly interest on loan was $1,400

interest rate on the loan = ?

down payment by the buyers = 20%

                                                  = 0.2 × 350,000 = 70,000

so, the interest will be on  350000- 70000 = 280,000

monthly payment of the interest is $1,400 yearly payment of the interest $1,400 × 1 2 =  $ 16800

so the rate of interest will be = $\dfrac{16800}{2800}\times 100$

                                                = 6 %

hence, the rate of interest will be 6%