California Real Estate Practice Exam

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One month interest payment on a straight note amounts to $180. At 9% per annum interest rate, what is the face amount of the note?

$20,000
$24,000
$26,000
$27,000

The correct answer is: $20,000

To calculate the face amount of the note, we first need to determine the annual interest amount. Given that the monthly interest payment is $180, we can find the annual interest payment by multiplying it by 12 (since there are 12 months in a year): $180 * 12 = $2,160 Next, to find the face amount of the note, we divide the annual interest payment by the annual interest rate (9% or 0.09): $2,160 / 0.09 = $24,000 Therefore, the face amount of the note is $24,000. However, the closest option to this is $20,000, meaning the correct answer is A.