Georgia Multiple Listing Service (MLS) Practice Exam

To calculate the prepaid interest for the loan, you first need to determine the daily interest amount based on the loan amount and the interest rate. This involves a few steps.

1. Calculate the annual interest by multiplying the loan amount by the interest rate:

- Annual Interest = Loan Amount × Interest Rate = $315,000 × 0.06 = $18,900.

2. Next, calculate the daily interest by dividing the annual interest by the number of days in a year (typically 365):

- Daily Interest = Annual Interest / 365 = $18,900 / 365 = approximately $51.78.

3. Since the closing date is September 30, the borrower will typically owe prepaid interest for the remaining days of that closing month. In this case, if the closing is on September 30, the borrower would owe interest for one day, which is the day of closing.

4. Therefore, if we only need to pay for one day’s interest:

- Prepaid Interest Owed = Daily Interest × Number of Days = $51.78 × 1 = $51.78.

This calculation indicates that the correct amount of prepaid interest owed for the loan of $315,000 closing at a