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.

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What is the first month's interest on a 30 year amortized loan of $250,000 at 7% interest?

$1,458
$1,750
$1,250
$2,000

The correct answer is: $1,458

The correct answer is A. On a 30 year loan of $250,000 with a 7% interest rate, the first month's interest would be $1,458. This is calculated by taking the annual interest rate (7%) and dividing it by 12 (the number of months in a year) to get the monthly interest rate of 0.583%. Then, this monthly interest rate is multiplied by the loan amount of $250,000 to get $1,458. Option B is incorrect because it is based on a monthly interest rate of 0.7%, which is too high. Option C is incorrect because it is based on a monthly interest rate of 0.5%, which is too low. Option D is incorrect because it is based on using the annual interest rate (7%) instead of the monthly interest rate.