Real Estate Math Exam Flashcards
The fastest way to calculate one month’s interest on a real estate loan with an interest rate of 7.2% interest per annum is to multiply the principal balance by:
A. 0.006
B. 0.6
C. 7.2% and divide by 12
D. 12 and divide by 7.2%
A. 0.006
-By dividing the 7.2% rate by 12 first, you can find one month’s interest by multiplying the loan amount by .006; 7.2% divided by 12 = .006, rate for one month.
A duplex with a fair market value of $20,000 and an outstanding loan balance of $12,000 was exchanged for a four-plex with a market value of $35,000 and an outstanding $18,000 loan balance. The owner of the duplex would pay in cash or secondary financing:
A. $6,100
B. $8,100
C. $9,100
D. $15,100
C. $9,100
- Market Value - Loan = Equity Duplex
$20,000 - $12,000 = $8,000
Four-plex $35,000 - $18,000 = $17,000
Difference in equities amounts to $9,000.
Mr. Brown, licensed broker, took an offer from Mr. Green on land for $6,000 with the following terms: $2,000 down and purchase money trust deed and note for the balance, payable $70 per month including interest at 7.2%. If the offer was accepted by the seller, what is the balance of the loan after the first 3 months payment?
A. $3,186
B. $3,467
C. $3,861
D. $3,790
C. $3,861
- $6,000 price - $2,000 down = $4,000 first trust deed.
$4,000 x .006 = $24.00 interest first month.
$70 - $24 = $46.00 applied to principal.
$4,000 - $46 = $3,954 balance after first month.
$3,954 x .006 = $23.72 interest second month.
$70 - $23.72 = $46.28 applied to principal.
$3954 - $46.28 = $3907.72 balance after second month $3,907.72 x .006 = $23.45.
$70 - $23.45 = $46.55 applied to principal.
$3,907.72 - $46.55 = $3,861.17.
After subtracting $140.00 escrow fees and 6% commission on gross sales price, a seller receives $13,584.00. What is the selling price?
A. $12,770
B. $14,440
C. $14,540
D. $14,600
D. $14,600
- Selling price (100%) = $13,584 + $140 + 6% 94% = $13,584 + $140 = $13,724
$13,724 divided by 94% = $14,600.
Keith Johnson purchased a property at 20% less than the listed price and later sold the property for the original listed price. What was the percentage of profit?
A. 10%
B. 20%
C. 25%
D. 40%
C. 25%
- Assume that the property was listed at $10,000. Listed price less 20%= $8,000 purchase price. If it was sold at the listed price of $10,000, the owner made $2,000 profit. $2,00 profit divided by $8,000 cost = 25%.
Lots “A”, “B” and “C” sold for a total price of $39,000. If lot “B” was priced at $6,400 more than lot “A”, and lot “C” was priced at $7,100 more than lot “B”, the price of lot “A” was:
A. $13,000.00
B. $6,366.67
C. $5,433.33
D. $4,633.00
B. $6,366.67
- $39,000 = A+B+C= A + $6,400 + A + $7,100 + $6,400 + A;
39,000 = 19,900 + (3 x A); 39,000- 19,900 = 3 x A;
19,100 = 3 x A:
19,100 divided by 3 = A;
$6,366.67 = A
Assume a real estate salesman sold a residence for $31,000, If the broker’s commission was 6% and the salesman was to receive 45% of the total commission for selling the property, the salesman would receive:
A. $837.70
B. $959.95
C. $1,860.00
D. None of the above
D. None of the above
- $31,000 x 6% = $1860 Total Commission $1,860 x 45% = $837.00 Choice “A” is close, but not exactly $837.00
Smith and Allen wish to exchange real property. Smith owns a property valued at $150,000 against which there is a $35,000 trust deed. Allen owns property worth $105,000 on which there is an existing first trust deed of $25,000 and a second trust deed of $20,000. Allen has $15,000 in cash which he is willing to pay towards the exchange. If Smith is willing to accept a second trust deed and note from Allen in order to effect the exchange, the amount of the note would be:
A. $20,000
B. $40,000
C. $50,000
D. $70,000
B. $40,000
Market Value - Loan = Equity
$150,000 - $35,000 = $115,000 Smith
$105,000 - $25,000 = $60,000 Allen
$115,000 - $60,000 = $55,000 Differences in Equity
$55,000 - $15,000 Cash = $40,000 Second
An apartment house property costs $240,000 and this price has been verified to be an accurate estimate of the property value. In comparable circumstances, it is also verified that the owner may use a 10% capitalization rate to the purchase price in determining his net income. Should there be a 10% increase in rental income with no increase in the owner’s expense and should the capitalization rate of the property be increased to 12%, what would be the estimated value of the property be?
A. $220,000
B.$240,000
C.$264,000
D. None of the above
A. $220,000
Value x Cap Rate = Income
$240,000 x 10% = $24,000 Income
10% Income Increase = $2,400
New Income = $26,400
New Cap Rate = 12%
Value = $26,400 / 12% = $220,000
Able purchased a $15,000 home. His down payment amounted to 6 2/3% of the purchase price; the balance was carried as a first trust deed bearing interest at 8.4% per annum. The principal is to be repaid at $50.00 per month. A three-year insurance policy costs $72.00; the property taxes are $360.00 per year. Able is required to make a proportionate monthly payment to a loan trust fund for these items. The total amount of the first monthly payment most nearly would be:
A. $267
B. $182
C. $186
D. $188
B. $182
6 2/3% = Fraction 1/15;
$15,000 x 6 2/3% (or 0.07) = $1,000;
$15,000-$1,000 = $14,000 x 0.084 = $1,176 Interest per year;
$1,176 divided by 12 = $98 Interest per month principal = 50.00 Principal 3-Year $72.00 Divided by 36 months = 2.00 Insurance;
$360 Taxes divided by 12 = $30.00 Taxes;
98+50+2+30 = $180.00 most nearly
