NMLS MATH QUESTIONS AND ANSWERS A+
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Annual Interest Amount Formula
Loan Amount × Note Rate (Interest Rate or Nominal Rate)
Monthly Interest Amount Formula
Loan Amount × Note Rate ÷ 12
On a loan amount of $110,000 with an interest rate of 5.25%, what is the amount
of interest the borrower will pay in a year?
$5,775.00 ($110,000×5.25%)
On a loan amount of $110,000 with an interest rate of 5.25%, what is the amount
of interest the borrower will pay monthly?
$481.25 ($110,000×5.25%÷12)
When the loan amount is multiplied by the note rate, what is the result known as?
Annual interest charge
Annual Private Mortgage Insurance formula
Loan amount × PMI factor (or PMI rate)
Monthly Private Mortgage Insurance formula
Loan amount × PMI factor (or PMI rate) ÷ 12
If $90,000 is the loan amount on a $100,000 home with a Fannie Mae/Freddie Mac
coverage rate of 0.62%, what is the monthly PMI cost?
$46.50 ($90,000×0.62%÷12)
Gross Monthly Income (Hourly Wage Formula)
Hourly Wage × Hours Worked per Week × 52 (weeks per year) ÷ 12
Gross Monthly Income (Weekly Wage Formula)
Weekly wage × 52 (weeks per year) ÷ 12
Gross Monthly Income (Bi-Weekly Salary)
Bi-weekly pay × 26 (# of pay periods/year) ÷ 12
Gross Monthly Income (Semi-weekly/Bi-monthly Salary)
Bi-monthly salary × 24 (or divided by 2)
If a borrower is paid $14.50/hour and works 30 hours per week, how much do they
receive per month?
$1,885.00 ($14.50×30×52÷12)
If a borrower receives a bi-weekly salary of $1,000, how much is their monthly
income?
$2,166.67 ($1000×26÷12)
How many bi-weekly pay periods are in a year?
26 (52 weeks ÷ 2)
How many bi-monthly pay periods are in a year?
24 (12 months × 2)
Down Payment (Minimum Investment) on a FHA Loan
3.5% (can be a gift)
Down Payment (Minimum Investment) on a VA or USDA Loan
No down payment required on these loans
GRADED.Buy Quality Materials!
Annual Interest Amount Formula
Loan Amount × Note Rate (Interest Rate or Nominal Rate)
Monthly Interest Amount Formula
Loan Amount × Note Rate ÷ 12
On a loan amount of $110,000 with an interest rate of 5.25%, what is the amount
of interest the borrower will pay in a year?
$5,775.00 ($110,000×5.25%)
On a loan amount of $110,000 with an interest rate of 5.25%, what is the amount
of interest the borrower will pay monthly?
$481.25 ($110,000×5.25%÷12)
When the loan amount is multiplied by the note rate, what is the result known as?
Annual interest charge
Annual Private Mortgage Insurance formula
Loan amount × PMI factor (or PMI rate)
Monthly Private Mortgage Insurance formula
Loan amount × PMI factor (or PMI rate) ÷ 12
If $90,000 is the loan amount on a $100,000 home with a Fannie Mae/Freddie Mac
coverage rate of 0.62%, what is the monthly PMI cost?
$46.50 ($90,000×0.62%÷12)
Gross Monthly Income (Hourly Wage Formula)
Hourly Wage × Hours Worked per Week × 52 (weeks per year) ÷ 12
Gross Monthly Income (Weekly Wage Formula)
Weekly wage × 52 (weeks per year) ÷ 12
Gross Monthly Income (Bi-Weekly Salary)
Bi-weekly pay × 26 (# of pay periods/year) ÷ 12
Gross Monthly Income (Semi-weekly/Bi-monthly Salary)
Bi-monthly salary × 24 (or divided by 2)
If a borrower is paid $14.50/hour and works 30 hours per week, how much do they
receive per month?
$1,885.00 ($14.50×30×52÷12)
If a borrower receives a bi-weekly salary of $1,000, how much is their monthly
income?
$2,166.67 ($1000×26÷12)
How many bi-weekly pay periods are in a year?
26 (52 weeks ÷ 2)
How many bi-monthly pay periods are in a year?
24 (12 months × 2)
Down Payment (Minimum Investment) on a FHA Loan
3.5% (can be a gift)
Down Payment (Minimum Investment) on a VA or USDA Loan
No down payment required on these loans
