If a house sold for $420,000 with a 20% down payment, what was the interest rate if the monthly interest was $1,400?

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