Nebraska Real Estate Practice Practice Exam

To determine the interest rate from the given information, we can start by calculating the amount financed after the down payment.

1. Calculate the down payment:

- A 20% down payment on a house priced at $420,000 is calculated as:

\[

\text{Down Payment} = 0.20 \times 420,000 = 84,000

\]

2. This means the loan amount or the amount financed is:

\[

\text{Loan Amount} = 420,000 - 84,000 = 336,000

\]

3. Knowing that the monthly interest payment is $1,400, we can find the annual interest rate using the formula for monthly interest:

\[

\text{Monthly Interest} = \text{Loan Amount} \times \left(\frac{\text{Annual Interest Rate}}{12}\right)

\]

Plugging in the values:

\[

1,400 = 336,000 \times \left(\frac{r}{12}\right)

\]

4. Now, we can solve for \(r\) (the annual interest rate):

- Multiply both sides by