Mortgage Broker Licensing Practice Exam · Question
What is the monthly payment required for a $280,000 mortgage at 4.25% compounded semi-annually, amortized over 30 years?
First, calculate the effective monthly interest rate: (1 + 0.0425/2)^(2/12) - 1 = (1.02125)^(1/6) - 1 ≈ 0.003507. Then, use the mortgage payment formula: PMT =
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Question: What is the monthly payment required for a $280,000 mortgage at 4.25% compounded semi-annually, amortized over 30 years?
Answer options:
- $1,350.00
- $1,385.25 ✅ $1,420.75
- $1,450.00
Correct answer: $1,420.75
Explanation: First, calculate the effective monthly interest rate: (1 + 0.0425/2)^(2/12) - 1 = (1.02125)^(1/6) - 1 ≈ 0.003507. Then, use the mortgage payment formula: PMT = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ], where P = $280,000, i = 0.003507, and n = 30 * 12 = 360. PMT = $280,000 [ 0.003507(1 + 0.003507)^360 ] / [ (1 + 0.003507)^360 – 1 ] = $1,420.75.
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Question explanations
- What is the typical time frame for a mortgage agent to provide the required disclosure statement to a client?
- Funds received from a client or investor that the brokerage holds on their behalf must be deposited into:
- Ontario mortgage agents must complete which of the following at each licence renewal?
- Which entity is responsible for licensing and regulating mortgage brokers and agents in Ontario?
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