A buyer is assuming a seller's outstanding mortgage with an unpaid balance of $58,700 at a 9% annual interest rate. What is the interest amount debited at closing on August 18?

To determine the interest amount debited at closing for the assumption of the seller's outstanding mortgage, we must first calculate the daily interest on the mortgage balance. The unpaid balance is $58,700, with an annual interest rate of 9%.

1. The first step is to calculate the daily interest rate.

   • Annual interest rate = 9% = 0.09
   • Daily interest rate = (0.09 / 365) = 0.00024657534 (approximately).

2. Now, calculate the daily interest amount for the outstanding balance.

   • Daily interest = Outstanding balance x Daily interest rate
   • Daily interest = $58,700 x 0.00024657534 ≈ $14.48 (approximately).

3. Next, we need to determine the number of days from the last payment date to the closing date, which is August 18. Typically, interest is calculated from the last payment through the closing date. Assuming a possible last payment date at the end of the previous month (July 31), there are 18 days from August 1 to August 18.

4. Then we multiply the daily interest amount by the number of days:

   • Total interest = Daily interest