Question

"Pat bought a house and got a new interest-only loan. She paid $12,600 in interest the first year and the sale price of the property was $210,000. What was the interest rate?"

Answer 1

Answer:

The interest rate is 6%

Explanation:

The computation of the interest rate is shown below:

Interest rate is

= Interest paid for the first year ÷ Sale price of the property

where,

Interest paid for the first year is $12,600

And, the sale price of the property is $210,000

Now place the values to the above formula

So, the interest rate is

= $12,600 ÷ $210,000

= 6%

Hence, the interest rate is 6%