Pratice Chapter 16 - Real Estate Math

Question 1

Area Calculations - Rectangle or Square

Answer 1

Area = Width x Depth
Width = Area / Depth
Depth = Area / Width

Question 2

Area Calculations - Triangle

Answer 2

Area = (Height x Base) / 2
Base = (2 x Area) / Height
Height = (2 x Area) / Base

Question 3

Volume Calculations

Answer 3

Volume = Width x Height x Depth

Question 4

Acreage Calculations

Answer 4

1 Acre = 43,560 sq ft.
Acres = Area / 43,560 sq ft.
Area = Number of Acres x 43,560 sq ft.

Question 5

Commission Calculations

Answer 5

Commission = Sales Price x Commission Rate (as a percentage)
Commission Rate = Commission / Sales Price
Sales Price = Commission / Commission Rate

Question 6

Discount Points

Answer 6

1 Discount Point = 1% of the loan amount

Question 7

Loan to Value (LTV)

Answer 7

Loan Amount / Value of Property

*Based on hte contract price or appraised value, whichever is LESS

Question 8

Housing Expense Ratio

Answer 8

FHA sets the ratio at < 31%

Total monthly HOUSING expenses / Total monthly income <31%

Question 9

Debt-to-Income Ratio

Answer 9

FHA sets the ratio at < 43%

Total monthly recurring DEBT / Total monthly income < 43%

*The dept-to-income ratio includes housing expenses PLUS other recurring debts

Question 10

Appreciation

Answer 10

Value of Property x (1 + Rate of Appreciation (expressed as a decimal))

Question 11

Depreciation

Answer 11

Value of Property x (1- Rate of Depreciation (expressed as a decimal))