What is the stated interest rate of the mortgage?

The stated interest rate of a mortgage refers to the nominal interest rate that is specified in the mortgage agreement, independent of the frequency of compounding. The answer provided, which discusses a 4.75% compounded semi-annually not in advance, indicates the way interest is applied or calculated over time.

When determining which option represents the stated interest rate, it is essential to consider both the percentage rate and how interest is compounded. In this case, the 4.75% rate reflects the precise interest rate that can be directly applied to the principal amount over the term of the mortgage.

It's important to clarify that "not in advance" implies that interest calculations begin as scheduled instead of being prepaid, which is standard in many mortgage agreements. Each option presents different rates and compounding methods, but the fundamental aspect of determining the stated interest rate lies in its value and application.

In contrast, other options may have either a higher or lower stated rate or different compounding methods that might not reflect the quoted interest in the same manner. This highlights the significance of understanding both the percentage and the compounding criteria, which ultimately favor the choice of 4.75% compounded semi-annually not in advance as the stated interest rate in this context.