A 3-year straight note was obtained at 10% per year. Interest paid the first two years was $42,000. The loan on the house was 75% of the value. What was the total value of the property?

$280,000

Explanation:

Based on the information provided within the question it can be said that the total value of the property is that of $280,000. This can be calculated the following way. Since two years' interest payments equal $42,000, then that means that one year equals $21,000. Since that is a 10% we divide the yearly payment by 0.10 (10%) which gives us the principal balance of $210,000.

Finally we divide $210,000 by 0.75 (which is 75% of the home value) which gives us the total value of $280,000

answer; functional fixedness;