California Real Estate Practice Exam

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Master the California Real Estate Exam with our comprehensive practice quiz. Get expert tips, detailed content review, and insider strategies to pass on your first try.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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How much interest will a home buyer pay in the first year on a $280,000 loan at a 7% interest rate?

$19,600
$20,000
$18,500
$21,000

The correct answer is: $19,600

The correct answer is A $19,600. This is because in the first year, you will pay 7% of the loan amount in interest, which is $280,000 x 0.07 = $19,600. The other options are incorrect because they are either too high or too low. Option B is close, but it assumes that the interest rate is calculated on the principle amount without taking into account the decrease in balance as you make payments. Option C is too low because it assumes a lower interest rate. Option D is too high because it assumes a higher interest rate. Therefore, the correct answer is A.