Loan Officer Practice Exam

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If a loan amount is $235,000 at a 6.25% interest rate, what is the rounded per diem for prepaid interest if the loan funds on September 13?

$14,687.50
$1,468.75
$40.24
$402.39

The correct answer is: $40.24

To determine the rounded per diem for prepaid interest, you need to calculate the daily interest amount based on the loan details provided. The first step is to calculate the annual interest by applying the interest rate to the loan amount. The formula for calculating annual interest is: Annual Interest = Loan Amount × Interest Rate In this case: Annual Interest = $235,000 × 0.0625 = $14,687.50. Next, to find the per diem (daily interest amount), you divide the annual interest by the number of days in a year, which is typically considered to be 365. So, the calculation for daily interest is: Per Diem = Annual Interest / 365 Per Diem = $14,687.50 / 365 ≈ $40.24. This value represents the amount of interest that accumulates on a daily basis for the given loan amount and interest rate. Therefore, the rounded per diem for prepaid interest, calculated on September 13 or any day thereafter, would be approximately $40.24. This approach accurately reflects how interest accrues on a loan over time and ensures that you understand the calculation process for determining prepaid interest.