exam B Flashcards
1
Q
- The primary difference between single agency and limited consensual dual agency is
a. the ability to provide advice and engage in negotiations.
b. fee splitting arrangements.
c. whether the buyer or the seller pays the commission.
d. whether the client is the buyer or the seller.
A
- a. The answer is the ability to provide advice and engage in negotiations. In single agency, the licensee has a client to whom she owes fiduciary obligations of advice and negotiation assistance. In limited consensual dual agency, the agent is not allowed to provide advice or negotiation assistance, because that would favor one party over another.
2
Q
- Which of the following is NOT a seller-required disclosure in Alabama?
a. Presence of lead-based paint in a residence built before 1978
b. Prior owner committed suicide in the property
c. Termite infestation that has weakened most floor and roof supports
d. Type of agency relationships offered by the real estate company
A
- b. The answer is prior owner committed suicide in the property. A suicide is a stigma on the property, but stigma does not have to be disclosed by the seller in Alabama. The other choices are all required disclosures. If the buyer has his own agent and is the client of that agent, and if the buyer’s agent knows of the suicide, the buyer’s agent must disclose to the client. The seller’s agent is under no such obligation to the buyer.
3
Q
- In Alabama, who is responsible for the real estate activities carried on in a real estate office?
a. The qualifying broker
b. The associate broker
c. The salesperson
d. The personal assistant
A
- a. The answer is the qualifying broker. Qualifying brokers are responsible for the real estate activities performed by the salespeople and associate brokers who are affiliated with them.
4
Q
- A prospective homebuyer signs a brokerage agreement under which the real estate professional will help this client find a three-bedroom house in the $185,000 to $200,000 price range. A seller comes into the real estate professional’s office and signs a listing agreement in which the real estate professional will act as the seller’s agent to sell a two-bedroom condominium for $170,000. Based on these facts, which statement is TRUE?
a. The buyer is the real estate professional’s client; the seller is the real estate professional’s customer.
b. The buyer is the real estate professional’s customer; the seller is the real estate professional’s client.
c. While both the buyer and the seller are clients, the real estate professional owes the fiduciary duties of an agent only to the seller.
d. Because both the buyer and the seller are the real estate professional’s clients, the real estate professional owes the fiduciary duties of an agent to both.
A
- d. The answer is because both the buyer and the seller are the real estate professional’s clients, the real estate professional owes the fiduciary duties of an agent to both. Both the buyer and the seller are the real estate professional’s clients. The real estate professional thus owes each of them fiduciary duties.
5
Q
- A real estate professional who represents the seller is showing a house to a prospective buyer-customer. The real estate professional knows that the house has water problems in the basement. Which of the following is TRUE?
a. Withholding the information properly protects the confidence of the seller.
b. Withholding the information prevents the buyer from making an informed decision.
c. Disclosing the information could create a fiduciary relationship with the buyer.
d. Disclosing the information violates the real estate professional’s fiduciary duty to the seller.
A
- b. The answer is withholding the information prevents the buyer from making an informed decision. The duty of disclosure includes relevant information or material facts that the real estate professional knows or should have known, regardless of whether those facts are favorable or unfavorable to the principal’s position.
6
Q
- The licensee represents the seller. The licensee receives a written offer that is 50% below the asking price. How should the agent respond?
a. Send the offer back to the other agent telling the buyer to offer more
b. Promptly present the offer to the seller
c. Call the seller and advise the seller to ignore the offer
d. Refuse to present such an insulting offer
A
- b. The answer is promptly present the offer to the seller. The seller must make the decision to accept or reject the offer.
7
Q
- The duties that an agent owes to a client are established by
a. the Real Estate Consumer Agency Disclosure Act.
b. common law.
c. the agent’s broker.
d. the agent’s client.
A
- a. The answer is the Real Estate Consumer Agency Disclosure Act. The Real Estate Consumer Agency Disclosure Act, better known in Alabama as RECAD, became law October 1, 1996. The Alabama agency law establishes the duties that an agent owes to a client, whether buyer, seller, tenant, or landlord.
8
Q
- What duties are owed to real estate customers in Alabama?
a. Good faith, loyalty, and fidelity
b. Promote the best interests of the customer
c. Honesty, good faith, reasonable skill and care, and accounting
d. None of these
A
- c. The answer is honesty, good faith, reasonable skill and care, and accounting. The other listed duties are owed to clients, who are represented by the agent in a fiduciary capacity.
9
Q
- A real estate professional shows properties listed for sale with her company to a prospective buyer. The buyer has refused buyer representation. The buyer is the real estate professional’s
a. customer.
b. client.
c. principal.
d. fiduciary.
A
- a. The answer is customer. The third party or nonrepresented consumer for whom some level of service is provided is a customer and is entitled to fairness and honesty.
10
Q
- A buyer’s agent is aware that a murder was committed in a home and that home is reputed to have paranormal activity. Must this information be disclosed to a client?
a. Yes, known stigmas must be disclosed by all Alabama licensees.
b. No, this does not affect health or safety, so there is no need to disclose.
c. No, there is no scientific proof supporting the existence of ghosts.
d. Yes, known stigmas must be disclosed by a buyer’s agent to a client.
A
- d. The answer is yes, known stigmas must be disclosed by a buyer’s agent to a client. That is because the buyer’s agent has a fiduciary responsibility to the client and must disclose all information that could affect the buyer’s purchase decision.
11
Q
- Your client wishes to purchase a beach house for his large extended family. You find one that is only 900 square feet, but it is located on a double lot. You estimate construction costs to expand the house to 3,000 square feet. Should you recommend that your client make an offer that will result in acquisition costs and expansion costs significantly less than the completed value of the house?
a. No, because a larger commission will be earned if he buys a home that is already the size he wants
b. Yes, assuming your construction costs are accurate
c. Yes, assuming there are no restrictive covenants limiting the size of houses
d. No, because he might not be able to obtain permits for the expansion
A
- d. The answer is no, because he might not be able to obtain permits for the expansion. You need more information before making a recommendation. Because this is a beach house, relevant authorities will have to approve the expansion and the site work necessary for the expansion. Without that approval, your client might not be able to enlarge the house, at any price.
12
Q
- A salesperson presents on offer on behalf of her client, who is also her son. The offer is 10% below the salesperson’s estimate of the fair market value of the property. What disclosures, if any, must be made in the offer?
a. The son is related to the salesperson
b. The offer is a below-market offer
c. The son is related to the salesperson and the offer is a below-market offer
d. None of these
A
- a. The answer is the son is related to the salesperson. Licensees must disclose their own status as a licensee when buying or selling real estate and must also disclose their relationship to a buyer or seller who is a family member.
13
Q
- A person passes the real estate license exam but has no desire to immediately begin selling real estate. Which of the following is most likely TRUE?
a. The temporary license will be issued on active status.
b. The original license will be issued on inactive status.
c. The licensee must find a broker willing to accept the license.
d. The temporary license will be issued on inactive status.
A
- d. The answer is the temporary license will be issued on inactive status. This allows the licensee to maintain the license, be exempt from continuing education responsibilities, and have the option to activate the license fairly quickly if desired.
14
Q
- A real estate professional who is the agent of the buyer should do which of the following?
a. Advise the buyer if the listing price of the seller’s house is unrealistic
b. Disclose to the seller that the buyer is a member of a protected class
c. Disclose to the seller the maximum price the buyer is willing to pay
d. Present to the seller only offers that are acceptable
A
- a. The answer is advise the buyer if the listing price of the seller’s house is unrealistic. As part of the fiduciary duties owed a principal, an agent for the buyer should disclose to the buyer if the property is overpriced.
15
Q
- A German citizen is a resident alien lawfully residing in Alabama. She wishes to obtain a real estate license. Which of the following is TRUE?
a. She must meet the same requirements as an Alabama citizen.
b. In addition to all other licensing requirements, she must have been a resident alien for at least 24 of the last 60 months.
c. In addition to all other requirements, she must pay an additional fee for a German background check.
d. She must be a citizen of the United States to apply for a real estate license.
A
- a. The answer is she must meet the same requirements as an Alabama citizen. Resident aliens lawfully residing in the state are treated the same as citizens for purposes of obtaining a real estate license, except they are required to provide proof of legal residency.
16
Q
- What is the purpose of the agency disclosure form?
a. To inform the consumer what type of representation the licensee is providing the consumer
b. To force the consumer to pay a fee
c. To disclose material adverse facts about the property
d. To obtain payment of a fee, indicating agency representation
A
- The answer is to inform the consumer what type of representation the licensee is providing the consumer
17
Q
- A buyer’s agent wishes to make a full-price offer for a property. Rumor is that there is high interest in the property, and multiple offers will probably be presented in the very near future. The agent does not want to become involved in a bidding war. How can she increase the likelihood that her offer will be accepted?
a. Insist that the listing agent present the offer to the seller immediately
b. Include a very short expiration date on the offer, such as 24 hours
c. Show the property as pending under contract on the MLS
d. Include a “sudden death” clause in the offer
A
- b. The answer is include a very short expiration date on her offer, such as 24 hours. All written offers must be presented to the seller as soon as received. If a buyer wants to get a signed contract before someone else submits a better offer, then the buyer wants to motivate the seller to sign the offer as quickly as possible. Putting a short deadline of 24 hours is one way to speed the seller’s decision making. Only the listing agent can make changes on MLS, and there is no such thing as a “sudden death” clause in real estate transactions.
18
Q
- A real estate professional is selling a home to a buyer and told her that the foundation was “solid as a rock” when he knew for a fact that it was slowly sinking into the landfill on which it was built. Now that the sale is completed, which of the following is LEAST likely to happen to the real estate professional?
a. Revocation of his license for failure to disclose a material fact
b. Being charged with intentional misrepresentation
c. Suit to recover money damages experienced by the buyer due to basement leakage
d. Successful defense against all charges based on loyalty to his client-seller
A
- d. The answer is successful defense against all charges based on loyalty to his client-seller. The duty of disclosure includes relevant information or material facts that the real estate professional knows or should have known, regardless of whether those facts are favorable or unfavorable to the principal’s position.
19
Q
- An associate broker lists her brother’s home for sale. Approximately twice a year, the rainfall is sufficient to overload the gutters. Water sheets off the roof, saturates the ground, and pools in the basement to a depth of approximately two inches. When a buyer asks about water problems, the broker responds that there are none. The parties sign a purchase contract, which contains language saying the property is sold “as-is.” What liability does the associate broker have?
a. Civil or criminal fraud
b. No liability, because Alabama is a caveat emptor state for used properties
c. Disciplinary action by AREC for misrepresentation when selling for self or for family members
d. No liability, because the broker owed her brother the duty of confidentiality
A
- c. The answer is disciplinary action by AREC for misrepresentation when selling for self or family members. If the same question involved a non-family member as the seller, there would be no liability because of the “as-is” clause. Because it was a family member, there is liability.
20
Q
- Which of the following listing agreements permit owners of a listed property to sell the property on their own without having to pay the listing broker a commission?
a. Exclusive-agency listing only
b. Open listing and exclusive-agency listing
c. Open listing only
d. Exclusive-right-to-sell listing and exclusive-agency listing
A
- b. The answer is open listing and exclusive-agency listing. In an exclusive-agency listing, one brokerage is authorized to act as the exclusive agent of the principal. However, the seller retains the right to sell the property without obligation to the brokerage. In an open listing, the seller retains the right to employ any number of brokers to sell the property. In an open listing, the seller is obligated to pay the listing broker a commission only if the listing broker is the procuring cause of the sale. In an exclusive- right-to-sell listing, if the property is sold while the listing is in effect, the seller must pay the broker a commission regardless of who sells the property.
21
Q
- Copies of signed contracts must be provide to clients and customers
a. within 48 hours.
b. at the time they are signed.
c. as soon as convenient.
d. within five business days.
A
- b. The answer is at the time they are signed. There is no specific deadline, but the agent cannot wait until it is convenient.
22
Q
- A buyer saw a house on March 10. She makes a written offer on the property on March 15. The offer was presented on March 16 and accepted by the seller on March 18. When should the agent give the buyer a signed copy of the contract?
a. March 10
b. March 15
c. March 16
d. March 18
A
- d. The answer is March 18. The buyer should be given a copy of the signed contract as soon as possible after acceptance by the seller on March 18. In Alabama, upon execution of any instrument in connection with a real estate transaction, licensees must deliver legible copies of the original document to each party at the time the contract is signed, as well as any other document signed at that time. The licensee should give the buyer a copy of the offer on March 15 and the accepted offer (contract) on March 18.
23
Q
- The licensee represents the seller. The licensee receives a written offer that is 50% below the asking price. How should the agent respond?
a. Send the offer back to the other agent telling the buyer to offer more
b. Promptly present the offer to the seller
c. Call the seller and advise the seller to ignore the offer
d. Refuse to present such an insulting offer
A
- b. The answer is promptly present the offer to the seller. The seller must make the decision to accept or reject the offer.
24
Q
- Laura makes an offer on a house, and the seller accepts the offer. At this point, Laura has what type of title to the property?
a. Voidable
b. Legal
c. Possessionary
d. Equitable
A
- d. The answer is equitable. On formation of the contract between both parties, the contract is now an executory contract with the buyer having equitable title. Voidable is a term used to describe a contract that is able to be voided because of duress, fraud, misrepresentation, or because one party to the contract is a minor, In the executory stage the seller holds legal title and possession until closing, unless a different time of possession is negotiated.
25
Q
- Which element is necessary for a legally enforceable contract for the sale of real estate?
a. Parties at least 19 years old, or 18 years old and married
b. Contract prepared by an Alabama-licensed attorney
c. Legal description of property being sold
d. Signed and notarized property condition addendum
A
- a. The answer is parties at least 19 years old, or 18 years old and married. This is the age of legal capacity in Alabama. Under current law, contracts do not have to be prepared by an attorney. A street address of the property is sufficient for a sales contract, but not for a deed. Alabama does not require any type of property condition or disclosure addendum.
26
Q
- A buyer’s agent is aware that a murder was committed in a home and that home is reputed to have paranormal activity. Must this information be disclosed to a client?
a. Yes, known stigmas must be disclosed by all Alabama licensees.
b. No, this does not affect health or safety, so there is no need to disclose.
c. No, there is no scientific proof supporting the existence of ghosts.
d. Yes, known stigmas must be disclosed by a buyer’s agent to a client.
A
- d. The answer is yes, known stigmas must be disclosed by a buyer’s agent to a client. That is because the buyer’s agent has a fiduciary responsibility to the client and must disclose all information that could affect the buyer’s purchase decision.
27
Q
- A seller wishes to list his property for $100,000 with a 6% commission. The listing agent believes the market value is $130,000, but the seller wants a quick sale. They agree to wait 48 hours before placing the property on MLS at $100,000. During that time, if the agent can put the property under contract with a qualified buyer for a sum in excess of $100,000, then the agent’s commission will be the excess over $110,000 rather than 6% of the sales price. Is this a reasonable solution to the situation?
a. No, the agent might make less money under this arrangement.
b. Yes, because it motivates the agent to find a buyer very quickly.
c. No, because listings cannot be intentionally withheld from MLS.
d. No, this arrangement is illegal.
A
- d. The answer is no, this arrangement is illegal. This is a net listing, which are illegal.
28
Q
- If an owner takes his property off the market for a definite period in exchange for some consideration but grants an individual the right to purchase the property within that period for a stated price, this is called
a. an option.
b. a contract of sale.
c. a right of first refusal.
d. an installment agreement.
A
- a. The answer is an option. An option is granted when an owner (optionor) gives the potential purchaser (optionee) the right to purchase the property at a fixed price within a certain period of time.
29
Q
- Breach of contract is refusal or failure to comply with the terms of a contract. If the seller breaches the purchase contract, the buyer may do all of the following EXCEPT
a. sue the seller for specific performance.
b. rescind the contract and recover the earnest money.
c. sue the seller for damages.
d. sue the broker for nonperformance.
A
- d. The answer is sue the broker for nonperformance. The broker is not a party to a real estate sales contract and could not be sued for nonperformance in the event of a seller’s breach.
30
Q
- A broker does not have to prove that she was the procuring cause in order to collect a commission if her seller sells the property without her help because she has an
a. option listing.
b. open listing.
c. exclusive right to sell listing.
d. exclusive agency listing.
A
- c. The answer is exclusive right to sell listing. In an exclusive right to sell listing, the listing broker receives a commission no matter who sells the listed property during the term of the listing. Brokers may have to prove they were the procuring cause in some open listing and exclusive agency listing situations, but procuring cause is of no significance in exclusive right to sell listing situations.
31
Q
- Which of the following is NOT a type of listing contract?
a. Open
b. Exclusive agency
c. Exclusive right to sell
d. MLS
A
- d. The answer is MLS. A clause permitting the property to be entered in the multiple listing system (MLS) may be included in an exclusive listing agreement with the seller’s consent.
32
Q
- A real estate professional is selling a home to a buyer and told her that the foundation was “solid as a rock” when he knew for a fact that it was slowly sinking into the landfill on which it was built. Now that the sale is completed, which of the following is LEAST likely to happen to the real estate professional?
a. Revocation of his license for failure to disclose a material fact
b. Being charged with intentional misrepresentation
c. Suit to recover money damages experienced by the buyer due to basement leakage
d. Successful defense against all charges based on loyalty to his client-seller
A
- d. The answer is successful defense against all charges based on loyalty to his client-seller. The duty of disclosure includes relevant information or material facts that the real estate professional knows or should have known, regardless of whether those facts are favorable or unfavorable to the principal’s position.
33
Q
- An associate broker lists her brother’s home for sale. Approximately twice a year, the rainfall is sufficient to overload the gutters. Water sheets off the roof, saturates the ground, and pools in the basement to a depth of approximately two inches. When a buyer asks about water problems, the broker responds that there are none. The parties sign a purchase contract, which contains language saying the property is sold “as-is.” What liability does the associate broker have?
a. Civil or criminal fraud
b. No liability, because Alabama is a caveat emptor state for used properties
c. Disciplinary action by AREC for misrepresentation when selling for self or for family members
d. No liability, because the broker owed her brother the duty of confidentiality
A
- c. The answer is disciplinary action by AREC for misrepresentation when selling for self or family members. If the same question involved a non-family member as the seller, there would be no liability because of the “as-is” clause. Because it was a family member, there is liability.
34
Q
- Penelope has made an offer to the seller who has countered and given Penelope 24 hours to accept the counter. In this case the original offer is considered to be
a. terminated.
b. executory.
c. voidable.
d. void.
A
- a. The answer is terminated. A counter offer terminates the original offer and creates a new offer. Since there is not a contract the terms are executory. An offer is not a contract and cannot be considered voidable or void.
35
Q
- A 40-acre tract was sold for $2,200 per acre. The seller realized a 14.5% profit from the sale. What was the original cost of the tract?
a. $75,240
b. $100,760
c. $102,924
d. $76,856
A
- d. The answer is $76,856. 40 acres × $2,200 per acre = $88,000 sales price, and $88,000 ÷ 114.5% (100% sales price + 14.5% profit) = $76,855.90 original cost, rounded to $76,856.
36
Q
- A broker’s office policy is that the sales associate’s share of a commission is 65%. What is the sales associate’s compensation if the sales price of a property is $195,000 and the broker is entitled to a 5.5% commission?
a. $697.13
b. $8,872.50
c. $69,712.50
d. $6,971.25
A
- d. The answer is $6,971.25. Two steps: (1) Find the gross commission by multiplying the sales price by the brokerage rate ($195,000 × 5.5% = $10,725). (2) Find the salesperson’s 65% of the gross commission ($10,725 × 65% = $6,971.25).
37
Q
- A home mortgage loan closed on July 1 for $165,000 at 4.5% interest amortized over 30 years at $836.03 per month. Using a 360-day year, what would the interest portion of the payment be on a payment made August 1?
a. $618.75
b. $725.60
c. $51.85
d. $700.00
A
- a. The answer is $618.75. Two steps: (1) Find annual interest based on the interest rate and principal balance ($165,000 × 4.5% = $7,425). (2) Find one month’s interest by dividing the annual interest by 12 ($7,425 ÷ 12 = $618.75).
38
Q
- If a residence is valued at $87,500 and its assessment ratio is 50% of market value, what are the annual taxes if the tax rate is $7.80 per $100 of assessed valuation?
a. $3,187.75
b. $5,608.96
c. $3,412.50
d. $6,825.00
A
- c. The answer is $3,412.50. $87,500 residence value × 50% = $43,750 assessed value; $43,750 assessed value ÷ $100 = 437.5; 437.5 × $7.80 = $3,412.50 annual taxes.
39
Q
- A real estate transaction has a closing date of November 15. The seller, who is responsible for costs up to and including the date of settlement, has already paid the property taxes of $5,116 for the calendar year. On the closing statement, the buyer will be
a. debited $976.50.
b. debited $639.50.
c. credited $639.50.
d. credited $976.50.
A
- b. The answer is debited $639.50. The buyer will be debited (charged) enough money on the closing statement to reimburse the seller for the unused portion of prepaid taxes. Three steps: (1) Find the monthly amount of the real estate taxes ($5,116 ÷ 12 = $426.33). (2) Find how many months lie between the settlement and the end of the year (15 days, or ½ month, in November and a full month in December = 1.5 months). (3) Find the taxes on 1½ months ($426.33 × 1.5 = $639.50).
40
Q
- Susan and Curtis are applying for a home loan. Susan has an annual gross income of $102,000 and Curtis earns $72,000 a year. They have monthly car payments of $875, monthly credit card payments of $620, and their monthly grocery expenses come to $1,200. If the lender uses debt ratios of 28% and 36% to qualify them, what is the maximum monthly housing expense they will qualify for?
a. $4,060
b. $5,220
c. $3,725
d. $2,525
A
- c. The answer is $3,725. $102,000 + $72,000 = $174,000 ÷ 12 = $14,500/month $14,500 × 28% (0.28) = $4,060 $14,500 × 36% (0.36) = $5,220 – $1,495 other recurring debt = $3,725
41
Q
- After paying closing expenses of $550 and a 6% commission, the seller received a check for $149,850. What was the sale price of the property?
a. $160,000
b. $155,424
c. $159,424
d. $150,400
A
- a. The answer is $160,000. 100% – 6% = 94% $149,850 + $550 = $150,400 needed before commission. $150,400 ÷ 94% = $160,000.
42
Q
- If the Washingtons received a semiannual tax bill of $984.38, property in the jurisdiction is assessed at one-fourth the market value, and the tax rate is $4.50 per $100, what is the estimated market value of their property?
a. $43,750
b. $195,000
c. $175,000
d. $53,750
A
- c. The answer is $175,000. Tax rate = $4.50 ÷ 100 = 0.045 $984.38 × 2 = $1,968.76 annual taxes. $1,968.76 ÷ 0.045 = $43,750 assessed value $43,750 ÷ 25% = $175,000.
43
Q
- Twenty years ago, a family purchased a vacant lot for $26,500. They made no improvements during the time they owned the property. Recently, they sold the lot for $62,275. What was their percentage of gross profit?
a. 42.6%
b. 58.2%
c. 135%
d. 235%
A
- d. The answer is 235%. $62,275 sales price ÷ $26,500 original sales price two years ago = 2.35 or 235% gross profit.
44
Q
- A buyer bought a house for $125,000. The house, which had originally sold for $118,250, appraised for $122,500. Based on these facts, if the buyer applies for an 80% mortgage, what will be the amount of the loan?
a. $94,600
b. $98,000
c. $100,000
d. $106,750
A
- b. The answer is $98,000. A lender’s loan-to-value (LTV) ratio uses either the appraisal or the sales price for the value. The amount a property sold for at a previous transaction is irrelevant. In this case, the appraisal is less than the current selling price. If the loan is 80% of the value and the appraisal is used as the value, use this calculation to find the loan amount: $122,500 × 80% = $98,000.
45
Q
- If the mortgage loan is 80% of the appraised value of a house and the interest rate of 6% amounts to $460 for the first month, what is the appraised value of the house?
a. $115,000.
b. $92,000.
c. $73,600.
d. $55,200.
A
- a. The answer is $115,000. Three steps: (1) Find a year’s interest by multiplying the first month’s interest by 12 ($460 × 12 = $5,520). (2) Find the principal of the loan by dividing the annual interest by the interest rate ($5,520 ÷ 6% = $92,000). (3) Find the appraised value by dividing the loan amount by 80% because the principal (the loan) is 80% of the appraised value ($92,000 ÷ 80% = $115,000).
46
Q
- A house was listed for sale at $184,900. The seller received $171,000 after paying the broker a 5% commission. What was the selling price of the property?
a. $180,000.00
b. $176,423.68
c. $178,957.00
d. $189,345.79
A
- a. The answer is $180,000.00. $171,000 net ÷ 95% (100% – 5% commission) = $180,000 sales price.
47
Q
- What is the value of an apartment building with a $90,000 net operating income and an 8% cap rate?
a. $1,000,000
b. $1,500,000
c. $1,720,000
d. $1,125,000
A
- d. The answer is $1,125,000. $90,000 ÷ 0.08 (8%) = $1,125,000