Question

You are considering buying a new house, and have found a 20-year-fixed mortgage is available with an annual interest rate of 6%.

You are required to pay monthly. Then what is the corresponding monthly rate? Round off to 4 decimal points!
a. 0.0049
b. 0.0830
c. 0.0050
d. 0.0090

Answer 1

Answer: C. 0.0050

Explanation: To find the corresponding monthly rate, we need to divide the annual interest rate by 12.

6% / 12 = 0.005

Rounding off to 4 decimal points, the corresponding monthly rate is 0.0050, which is option (C).