A customer has a first mortgage of $100,000 at 5.5% and a second mortgage of $50,000 at 7.8%. What is the average rate of mortgage that the customer pays?
A) 6.7%
B) 7%
C) 5.9%
D) 6.5%
E) 6.3%

Question

Quizplus · Accepted Answer

The average rate can be calculated by taking the weighted average of the two mortgage rates based on their amounts. For the first mortgage: $100,000 at 5.5%, and for the second mortgage: $50,000 at 7.8%. The total amount is $150,000. The calculation is as follows: [(100,000 * 5.5) + (50,000 * 7.8)] / 150,000 = 6.3%.

A Customer Has a First Mortgage of $100,000 at 5