Question

John is going to make a house purchase and borrow $300,000 and has two options. John can have a mortgage for 30 years and interest rate of 7.5% or a mortgage for 15 years at an interest rate of 7.25%. What is the interest rate written as a decimal for the 30 loan?

Answer 1

To convert the interest rate from a percentage to a decimal, you divide the percentage by 100. For the 30-year mortgage with an interest rate of 7.5%, you would do the following calculation:

\[
\text{Interest rate as a decimal} = \frac{7.5}{100} = 0.075
\]

So, the interest rate written as a decimal for the 30-year loan is **0.075**.