A $100,000 note is sold to an investor, through a mortgage broker, at a 25% discount. The broker earned a 7.5% commission. What was the dollar amount of the commission?

Question

Quizplus · Accepted Answer

The note was sold at a 25% discount, which means the investor paid only 75% of the face value of the note, or $75,000.

The mortgage broker earned a commission of 7.5%, which is calculated as 7.5% of the selling price of $75,000:

0.075 x $75,000 = $5,625

Therefore, the answer is B: $5,625.

A $100,000 Note Is Sold to an Investor, Through a Mortgage