California Real Estate Practice Exam

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Prepare for the California Real Estate Exam. Study with flashcards and multiple-choice questions, each question includes hints and explanations. Get ready to ace your exam!

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A 12% down payment on a residence of $225,000 results in what monthly amount being subjected to interest?

$198,000
$198,020
$198,700
$198,050

The correct answer is: $198,000

To determine the amount subject to interest after a 12% down payment on a residence valued at $225,000, you first need to calculate the down payment. A 12% down payment on $225,000 is calculated as follows: Down Payment = Purchase Price x Down Payment Percentage Down Payment = $225,000 x 0.12 = $27,000 Next, subtract the down payment from the total purchase price to find the amount that will be financed, which is the loan amount subject to interest. Loan Amount = Purchase Price - Down Payment Loan Amount = $225,000 - $27,000 = $198,000 Thus, the amount being subjected to interest each month after making a 12% down payment on a $225,000 residence is $198,000. This makes the correct answer accurate since it correctly identifies the financed portion of the home price that will accrue interest.