What would be the first month's interest payment on a $22,250 note at an interest rate of 6.6% per annum?

To calculate the first month's interest payment on a $22,250 note at an annual interest rate of 6.6%, use the formula for interest:

Interest = Principal x Rate x Time

In this case:

• Principal is $22,250.
• The annual interest rate is 6.6%, which can be expressed as a decimal (0.066).
• Time is one month, which is 1/12 of a year.

Now, plug the values into the formula:

Interest = $22,250 x 0.066 x (1/12)

Calculating this step-by-step:

1. First, calculate the annual interest: $22,250 x 0.066 = $1,468.50

2. Now, divide by 12 to find the monthly interest: $1,468.50 / 12 = $122.375

Since we're rounding to two decimal places, the monthly interest payment is approximately $122.38.

This is why the correct answer is the choice that reflects this calculation. Understanding this process is crucial, as it emphasizes the importance of converting annual rates for monthly calculations, which is a common necessity in real estate finance.