The Buyer of a New Home Is Quoted a Mortgage

question 16

Multiple Choice

The buyer of a new home is quoted a mortgage rate of 0.5% per month.What is the APR on the loan?

• A) 0.50%
• B) 5.0%
• C) 6.0%
• D) 6.5%

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Definitions:

Tax-Free

Earnings or financial transactions that are exempt from taxation by the government.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, indicating the percentage of tax applied to your income for each tax bracket in which you qualify.

Average Tax Rate

The portion of an individual's or entity's taxable income that is paid in taxes, calculated by dividing the total tax amount by the taxable income.

Payroll Tax

A tax imposed on employers and employees, calculated as a percentage of the salaries that employers pay their staff.