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101 Cards in this Set
- Front
- Back
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If a room has measurements of 20-feet by 12-feet, and a height of 8 feet, what is its cubic footage? |
The correct answer is "A - 1,920 cubic feet " To find out the total cubic footage, multiply 20 x 12 x 8, for a total of 1,920.
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What is the cubic footage of a driveway that measures 60 feet long, 8 feet wide, and is 3 inches deep?
A) 480 cubic feet B) 160 cubic feet C) 120 cubic feet D) 90 cubic feet |
The correct answer is "C - 120 cubic feet " To find out the total cubic footage, multiply 60 x 8 x 1/4 (hint: 3 inches is the same as 1/4 of a foot), which brings a total of 120 cubic feet.
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If a driveway is 54 feet long, by 15 feet wide and 4 inches deep, and is going to be poured at a cost of $30 per cubic yard of concrete, what would be the cost of the concrete?
A) $300 B) $60 C) $270 D) $600 |
The correct answer is "A - $300 " To figure out the cost, multiply to find the cubic feet (so, 54' x 15' x 1/3'=270 cubic feet). Then divide 270 by 27 (there are 27 cubic feet in a cubic yard), to equal 10. 10 x $30= $300, which is the total cost.
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A lot that is 65 feet wide by 80 feet deep will be fenced on both sides and the rear. How many linear feet of fencing would be needed?
A) 145 ft. B) 225 ft. C) 290 ft. D) 160 ft. |
The correct answer is "B - 225 ft. " To figure out the linear feet, you would need the sum of all the sides to be fenced. 65' + 80' + 80' = 225 feet
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If a property sells for $12,100, and gains a 10% profit for the owner, what was the original cost of the property?
A) $1,100 B) $10,000 C) $13,200 D) $11,000 |
The correct answer is "D - $11,000 " Add 100% (the cost of the property) to 10% (the profit) for a total of 110% to get the selling price percentage. Then take $12,100 and divide it by the 110% to get the original cost of the property, $11,000.
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A $40,000 house appreciates in value at the rate of 2.5 percent each succeeding year. With this information, what is the value of the house at the end of the second year?
A) $41,000 B) $42,025 C) $43,075 D) $45,000 |
The correct answer is "B - $42,025 " To figure this out, first take $40,000 x 2.5% = $1,000 to give the appreciation for the first year. Add this to $40,000, for a total of $41,000. Next, take $41,000 x 2.5% = $1,025 to get the appreciation for the second year. Lastly, take $1,025 + $41,000 = $42,025, which is the value after the second year.
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Calder's Construction Company has built a home in a new subdivision and it was sold 6 months after it was built, for $48,500. This amount reflected a depreciation amount of 3%. Knowing this, what was the original asking price on the home?
A) $48,500 B) $50,000 C) $53,000 D) $51,500 |
The correct answer is "B - $50,000 " To figure this out, take the sale price and divide it by 97% (100%-3% depreciation=97%). So, $48,500/97% = $50,000
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Joe Arcikoski's duplex depreciates 3% each year for 5 years. Since the building originally cost $20,000, what is the current value of the duplex?
A) $15,000 B) $16,000 C) $17,000 D) $18,500 |
The correct answer is "C - $17,000 " To figure this out, first figure out the total depreciation (3% x 5 years = 15%), then multiply that by $20,000 ($20,000 x 15% = $3,000), and then subtract that amount from $20,000, for a total of $17,000.
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Mr. Inahurry sold his house for $27,000, which is a 10% loss over what he originally paid for it. What did he pay for the house originally?
A) $28,000 B) $30,000 C) $33,000 D) $35,000 |
The correct answer is "B - $30,000 " Take 90% (the value he got for the house when he sold it) and divide $27,000 by that 90%, for a total of $30,000.
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If Inga Ingerton's property, valued at $35,000, is assessed at 40% of its value, and the mill levy is 83, then what is Inga's annual tax on this property?
A) $1,400 B) $14,000 C) $1,162 D) $11,620 |
The correct answer is "C - $1,162 " Remember, with this type of problem, you take the value of the property ($35,000) multiplied by the percentage taxed (40%) for the assessed value ($14,000), and then multiply THAT number by the mill levy (in this case, .083), for the total of annual taxes, which is $1,162.
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If the assessed valuation of a property is $20,000, with a tax rate of $4.00 per $100, what is the annual tax?
A) $800 B) $660 C) $460 D) $200 |
The correct answer is "A - $800 " Remember that the $4.00 per $100 means that the $20,000 must be divided by 100, giving a total of $200. That, multiplied by $4.00 gives the total tax of $800.
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$140 is 3.5% of what amount?
A) $440 B) $4,440 C) $4,100 D) $4,000 |
The correct answer is "D - $4,000 " Remember to always divide to find the value or rate, so in this case, $140/.035 = $4,000.
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If Jamie's quarterly interest payments are $150 on a $12,000 loan, then what is her annual interest rate?
A) 5% B) 6% C) 6.50% D) 7% |
The correct answer is "A - 5% " To figure out a percentage, divide the income by the investment. So, $150 x 4 (quarters a year) = $600, and $600/$12,000 = 5%
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If Skylar's property has a net income of $5,480, and returns 8 percent annually on the investment, then what is her property's value?
A) $68,000 B) $68,500 C) $70,000 D) $72,500 |
The correct answer is "B - $68,500 " To reach this total, you take the interest rate into the income, to equal the investment. So, $5,480/.08 = $68,500.
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If an investment valued at $350,000 returns 12 percent annually, then what is the amount of income produced by this investment?
A) $4,200 B) $42,000 C) $3,920 D) $39,200 |
The correct answer is "B - $42,000 " Remember, take the value multiplied by the return to equal the income. So, in this case: $350,000 x 12% = $42,000
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If the capitalization rate on a building that produces a $20,000 annual income is 10 percent, what is the estimated value of the building?
A) $22,000 B) $200,000 C) $220,000 D) $222,200 |
The correct answer is "B - $200,000 " Remember, the interest rate into the income equals the investment, so you can use this here in a slightly different equation. $20,000/.10 (the rate) = $200,000.
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Madison Davidson negotiated for a $30,000 loan with $200 monthly payments, plus 9 percent interest. In this case, what is the monthly interest?
A) $225 B) $450 C) $425 D) $205 |
The correct answer is "A - $225 " First, you take $30,000 and multiply it by 9% for the total annual interest paid, or $2,700. Divide that by 12 (months) for a total of $225 per month interest payment.
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If a home appraised for $93,000, and Mr. Nickel, the borrower, puts 20% down, what would his loan amount be?
A) $74,400 B) $74,500 C) $91,400 D) $91,500 |
The correct answer is "A - $74,400 " To arrive at the loan amount, take the $93,000 appraisal amount and multiply that by 80% (loan needed) for a total loan amount of $74,400.
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Wayne Goodspeed falls in love with and buys a house for a price that is 5% more than the appraised value. He secures a 10% down loan for $220,000 which represents the appraised value less the 10% down. What was the purchase price, and how much did Wayne have to come up with in cash?
A) $256,666/$36,666 B) $244,444/$44,444 C) $256,666/$44,444 D) $244,444/36,666 |
The correct answer is "A - $256,666/$36,666 " A Purchase Price is $256,666. The total amount in cash Wayne needed to come up with is $36,666. Illumination: While it's not recommended that one pays more than the appraised value of a home, it can be done, as long as the buyer doesn't mind coming up with extra cash. To figure the amount, we do the following: Step 1 -$220,000 divided by 90% =244,444.44 Step 2 - $244,444.44 X 105% = $256,666.67 Step 3 - $256,666.67 minus $220,000 = $36,666
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Mr. Fixit wanted to remodel his business, so he got a loan of $4,300, at a rate of 6 percent interest. He paid this loan off in 8 months. Knowing this, what was the total amount of interest Mr. Fixit paid?
A) $21.50 B) $172 C) $258 D) $358 |
The correct answer is "B - $172 " To figure this problem, first take the loan amount multiplied by the interest rate for the annual interest ($258). Then divide this amount by 12 (as in months per year) to find out the interest paid per month. Multiply that total ($21.50) by 8 (months) for the total interest paid of $172.
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How much less are the monthly payments on a $36,000 home than on a $40,000 home if a 75% loan is obtained at $8.70 per month per $1000 of value?
A) $8.70 B) $17.40 C) $26.10 D) $28.90 |
The correct answer is "C - $26.10 " To arrive at this amount, you must find the difference between the prices of the two homes, which is $4,000, and then take that amount multiplied by 75%, for a total of $3,000 divided by $1000 = $3.00 X $8.70 for the difference of $26.10.
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If Salesperson Sarah receives 35 percent of a total commission from her broker, then what is Sarah's broker's share if the property sold for $23,000, and the commission was on a 6% basis?
A) $483 B) $897 C) $1,380 D) $1,390 |
The correct answer is "B - $897 " To figure out the broker's share, first take the sale price and multiply it by 6%, for a total commission of $1,380. The broker receives 65% of that, which is $897.
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Bailey Broker leases a property to Susie Smiley for 5 years. Bailey will receive a 5% commission. The rent for the property is $300 per month for the first year, with a $50-per-month increase each succeeding year. Knowing this, what will Bailey's commission be?
A) $1,200 B) $3,600 C) $4,200 D) $4,800 |
The correct answer is "A - $1,200 " To solve this problem, you must figure out the total rent for each of the 5 years, then add those together and multiply that sum by 5% to arrive at the commission. So, $300 x 12 months = $3,600; $350 x 12 months = $4,200; $400 x 12 months = $4,800; $450 x 12 months = $5,400; and $500 x 12 months = $6,000. The total of all these numbers is $24,000, and that multiplied by 5% equals a commission of $1,200.
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John and Sandi Samson, who file a joint income tax return, pay 28 percent income tax on their earnings. If they have an $85,000 mortgage at 8 percent interest, their allowable tax savings would be:
A) $190.40 B) $680 C) $1,904 D) $6,800 |
The correct answer is "C - $1,904 " To solve this problem, first multiply the mortgage by the interest to arrive at the annual interest. ($85,000 x .08 = $6,800) Next, multiply this number by the tax bracket to arrive at the savings. $6,800 x 28% = $1,904.
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If Chris's house depreciates at the rate of 2.5 percent per year for 10 years and has a present value of $12,500, what was the original value of the house?
A) $16,666 B) $17,000 C) $18,346 D) $20,000 |
The correct answer is "A - $16,666 " To solve this problem, first multiply 2.5 by 10 (years) for the total depreciation of 25%. Subtract that from 100% for 75%. Then, take $12,500/.75 = $16,666, which was the home's original value.
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An $11,000 house is assessed at 30% of its original cost. If the school tax on this property is 12 mills, then what was the approximate yearly tax, rounded off to the nearest dollar?
A) $40.00 B) $42 C) $33.00 D) $50.00 |
The correct answer is "A - $40.00 " To arrive at the answer, you would multiply as follows: $11,000 x .30 = $3,300, which is the assessed amount. Then take this total and multiply it by 12 mills, so $3,300 x .012 = $39.60, then round up to the nearest dollar, which gives you the answer of $40.00.
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A house is appraised for $25,000, and shows an assessed value of $20,000. The taxes on the house are $300 annually. What would the tax be on a house that is appraised at $45,000, with an assessed value of $40,000?
A) $150 B) $300 C) $600 D) $750 |
The correct answer is "C - $600 " To solve this problem, first figure out the levy percentage by dividing the tax amount by the assessed value (of the first house), and then multiply that number by $40,000 (the value of the second house). So, $300/$20,000=.015 mill levy. Then $40,000 x .015 = $600.
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What are the actual measurements of a property shown as 5 3/4 inches long and 4 1/2 inches wide if the scale is 1/8 inch=1 foot?
A) 12' x 9' B) 36' x 32' C) 46' x 36' D) 48' x 36' |
The correct answer is "C - 46' x 36' " First, begin with the basics. If 1 ft.=1/8 in., then 8 ft.=1 in. Use this to solve the problem -- 8 x 5 3/4 = 46, and 8 x 4 1/2 = 36, so the area is 46' x 36'.
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A house sale is closed on July 15. The taxes of $546 of the calendar year have been paid, as has the fire insurance premium of $102 for the calendar year. What is the total prepaid portion that the buyer will owe the seller?
A) $190 B) $300 C) $427 D) $638 |
The correct answer is "B - $300 " Add taxes and insurance=$648 and divide by 365 days in a year = $1.78 a day. Now figure out the days that the buyer owes the seller for – July 16 days, Aug. 31 days, Sept. 30 days, Oct. 31 days, Nov. 30 days, Dec. 31 days = 169 days X 1.78 a day (do not clear your calculator) = $300.03 that the buyer would owe the seller for the prepaid taxes and insurance.
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Ashley Anderson pays her taxes of $660 for the calendar year. She then sells her property and closes on June 15. What is the amount of the prepaid portion that is due back to her?
A) $297 B) $300 C) $357.50 D) $437.50 |
The correct answer is "C - $357.50 " This problem is similar to the previous one. You simply need to figure out the amount of time in which she did not use the property (6 1/2 months), and then figure out the monthly amount for taxes, were this amount divided into monthly payments ($660/12 = $55/mo.). Multiply the monthly amount by the months to find out the answer. So, $55 x 6 1/2 months = $357.50
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What is the selling price of a property if Christine Waite paid $350 for taxes due, has a $12,500 mortgage, paid a 6% broker commission, and netted $7,000 on the sale?
A) $21,117.02 B) $22,117.02 C) $22,546.77 D) $22,647.06 |
The correct answer is "A - $21,117.02 " To arrive at this answer, add $350 + $12,500 + $7,000 = $19,850. Divide that number by .94 (subtract the broker's commission of 6% from 100% for 94%) for a total of $21,117.02.
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A building that cost $300,000 to construct 10 years ago has depreciated 25%. The land costs $51,000, so the appraised value is:
A) $263,250 B) $265,000 C) $276,000 D) $300,000 |
The correct answer is "C - $276,000 " $300,000 x 25% (depreciation) = $75,000. Then subtract that from $300,000 for a total of $225,000, and add $51,000 for a total appraised value of $276,000.
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Freddy Froghammer owns a lot measuring 80 ft. x 120 ft. The city puts in a new street on the front and the side of his house and assesses him 6 cents per square foot based on the area of this lot. His costs are:
A) $57.60 B) $67.50 C) $576.00 D) $675.00 |
The correct answer is "C - $576.00 " To arrive at this answer, figure out the area first -- 120 x 80 = 9,600 sq. ft. Then multiply that by the assessed amount (6 cents), and this is what you'll have: 9,600 x .06 = $576.00
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If the transfer taxes are payable at the rate of 55 cents per $500 or part thereof, what is the grantor's cost on a $49,750 sale?
A) $5.50 B) $55.00 C) $125.00 D) $235.00 |
The correct answer is "B - $55.00 " To figure this, round up the $49,750 to $50,000, and then multiply that by 1.10. So, $50,000 x 1.10 = $55.00. (To arrive at the 1.10 amount, simply double the 55 cents, and the $500, so the amount charged is $1.10 per $1,000.)
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Rachel Davis buys a $20,000 property. She puts down $1,000, with the balance to be repaid over 20 years at 12% interest. Her monthly payments are $209.38. What is the approximate amount of interest paid on the loan at its maturity?
A) $31,500 B) $32,500 C) $35,000 D) $35,500 |
The correct answer is "A - $31,500 " First, figure out the months of the loan. For a 20 year loan, multiplied by 12, there will be 240 months. Take that amount and multiply by the monthly payments of $209.38, which equals $50,251.20. Subtract from that the original property price after the down payment, which is $19,000, and you arrive at the answer of $31,251.20, or approximately $31,500.
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Sydney Blackwell manages an office building with leases of $60,000 per year. Her management agreement is for 7 years, with fees as follows: 7% the first year; 5% the second and third years; and 3 % the remaining years. What will be Sydney's total management fee?
A) $10,000 B) $13,400 C) $15,400 D) $17,400 |
The correct answer is "D - $17,400 " To solve this problem, you have to figure out the commission for each year, as follows: 7% of $60,000 = $4,200; 5% of $60,000 = $3,000, and that multiplied by 2 years at that rate is $6,000; 3% of $60,000 = $1,800 x 4 (years at that rate) = $7,200. Add these totals to reach the total of $17,400.
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Find the annual percentage rate of net return of an $88,000 investment if the weekly gross income is $225.00 and monthly expense are $370.00.
A) 7% B) 8% C) 8.25% D) 9% |
The correct answer is "C - 8.25% " Start out by figuring the annual income from the property, which is $225 x 52 (weeks in a year) = $11,700. Now figure the yearly expenses, which is $370 x 12 (months in a year) = $4,440. Take $11,700 - $4,440 (the cost) = $7,260 for the annual net income, and divide this number by $88,000 (the investment price) for the percentage rate of 8.25%.
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Jeanne Marra owns a 110-acre orchard that yields an average net profit of $13,000. If she sells the land and invests the money at 5%, what price per acre must she sell for to match her present earnings?
A) $1,300 B) $1,567.85 C) $2,363.64 D) $2,600.43 |
The correct answer is "C - $2,363.64 " To solve this problem, you have to divide $13,000 by 5% = $260,000. Then take $260,000/110 (acres) to arrive at the price of $2,363.64.
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Find the capitalization rate on a building that is worth $430,000, and rents for $1,500 a month.
A) 3.75% B) 4.19% C) 5.19% D) 5.25% |
The correct answer is "B - 4.19% " To solve this, find the yearly rent, and divide that amount by the cost of the building. So, $1,500 x 12 = $18,000, and $18,000/$430,000 = 4.19%.
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An office building earns $850,000 per year, and expenses are 35% of that amount. If the property is capitalized at 12%, what is its approximate value?
A) $4,506,789 B) $4,604,167 C) $5,243,167 D) $6,545,722 |
The correct answer is "B - $4,604,167 " To solve this, first find out the amount spent on expenses. $850,000 x .35 = $297,500, then subtract that amount from the total, so $850,000 - $297,500 = $552,500. To reach the final answer, take $552,500/12% = $4,604,167 (the value).
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Mr. Ryan buys a home and obtains a $20,000 loan on which the monthly premiums will be $7.50 per $1,000. Annual taxes are $360, and a 3-year fire insurance policy costs $54. What was the first payment, including the taxes and insurance?
A) $181.50 B) $191.50 C) $210.95 D) $211.05 |
The correct answer is "A - $181.50 " To solve this, first take $7.50 x $20 (remember, it's 20 per $1,000), which gives you $150 payment. Then figure out the taxes by taking the total yearly payment of $360/12 = $30; and the insurance by $54/36 (months) = $1.50. So, $150 + $30 + $1.50 = $181.50.
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A map is drawn to scale and marked 13.5 inches x 16.5 inches. In reality, the area equals 108 ft. x 132 ft. What is the scale?
A) 1/2"=1' B) 1/4"=1' C) 1/6"=1' D) 1/8" = 1' |
The correct answer is "D - 1/8" = 1' " Take 108/13.50 = 8, and 132/16.50 = 8, so the scale is 1/8 inch = 1 foot.
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Mr. Smith's $85,000 condominium is assessed at 35% of value. The tax rate is $2.70 per $100 of value. If the tax increases $.35 per $100 of value, his new tax will be:
A) $458.56 B) $788.93 C) $907.38 D) $1,298 |
The correct answer is "C - $907.38 " First, figure out the assessed value. $85,000 x .35 = $29,750. Divide that by 100 for a total of $297.50, and then take that by the increased tax rate of $3.05 ($2.70 + .35) for a total of $907.38.
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A house is currently worth 50% of its original value. The land, however, has appreciated in 5 years from $60,000 to its current value of $96,000. What is the average annual rate of appreciation of the land over this 5-year period?
A) 6.25% B) 8% C) 11.50% D) 12% |
The correct answer is "D - 12% " First, we'll find out the appreciation amount. $96,000 - $60,000 = $36,000/5 years = $7,200 per year. Now take $7,200/$60,000 = 12%
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Since Alex is now entering the real estate profession, she purchases a new 4-door car costing $19,200. Her accountant says that she can deduct $4,800 as depreciation for this year. What percentage depreciation is she deducting?
A) 12% B) 14% C) 25% D) 27% |
The correct answer is "C - 25% " This is an easy one! Just take $4,800/$19,200 = 25%.
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The Thompson family has purchased a home for $74,500, making improvements of $5,000 for a fireplace, $1,500 for a new driveway, and $800 for painting. What is the adjusted basis of their home?
A) $76,000 B) $81,000 C) $81,800 D) $82,000 |
The correct answer is "B - $81,000 " To solve this problem, remember that painting is NOT considered a capital expense, so ignore that part of the equation. Then add the following: +$74,500 $5,000 + $1,500 = $81,000
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A home is sold for $74,500 and is appraised for $78,000. The buyer's down payment will be 20%. What will the loan amount be?
A) $14,900 B) $44,400 C) $59,600 D) $60,000 |
The correct answer is "C - $59,600 " Remember that lenders base the LTV on the lower price - whether purchase price or appraised value. So, in case, $74, 500 x .80 = $59,600
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Jackie Swain obtains a $65,000 loan on her home. The principal and interest payments are based on a factor of 8.05 per $1,000. The loan is for 30 years at 9%. How much does Jackie pay in total interest over the life of the loan?
A) $67,032 B) $79,342 C) $123,370 D) $134,836 |
The correct answer is "C - $123,370 " First, take $65 (per $1,000, remember) x 8.05 = $523.25 per month -- the payments on principal and interest. Then take $523.25 x 360 months = $188,370. Then $188,370 - $65,000 (loan) = $123,370 total interest paid.
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A broker has a four-year contract to manage a rental unit for an investor. He is to receive 50% of the first month's rent and 5% of each remaining month. The rent is $600/month. How much will the broker earn over the term of the contract?
A) $1,710 B) $2,480 C) $2,580 D) $3,080 |
The correct answer is "A - $1,710 " Start with 12 months x 4 years = 48 months, and then subtract the first month, so 47 mos. X $600 = $28,200. $28,200 x .05 = $1,410 + $300 (half the first month's rent) = $1,710 total commission earned.
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A two-story house measures 48' x 25' and costs $70.00 per sq. ft. to build. What is the construction cost of the house?
A) $168,000 B) $178,000 C) $200,000 D) $204,000 |
The correct answer is "A - $168,000 " First, we have to figure out the total square footage, so 48 x 25 = 1,200 x 2 (stories!) = 2,400 sq. ft. 2,400 x $70 (cost per sq. ft.) = $168,000
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Mr. Jackson purchases a home for $90,000. He paid $4,000 as an earnest money deposit, and is obtaining an 80% loan. Costs include $250 for title insurance, recording fees of $60, and a tax proration fee of $430. Mr. Jackson will need to bring a check to closing in the amount of:
A) $14,679 B) $14,740 C) $15,679 D) $17,921 |
The correct answer is "B - $14,740 " First, we'll take $90,000 x .80 = $72,000 loan, which means Jackson needs to have an $18,000 down payment. Now, add $18,000 + $250 + $60 + $430 = $18,740, and then subtract the earnest money amount of $4,000, for a total of $14,740 that needs to be brought to the closing.
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Three members of a partnership are investing $300,000 in a $1 million venture. If partner A invests $150,000, and partner B invests $100,000, then what is the equity position of the third party?
A) 1/6 B) 1/4 C) 1/3 D) 1/2 |
The correct answer is "A - 1/6 " Add together the known amounts for the first two partners, so $150,000 + $100,000 = $250,000, then $50,000 is the share of the third party. $50,000/$300,000 = 1/6.
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Buyer Vaughn is applying for an FHA mortgage on a house priced at $108,000. The maximum loan-to-value ratio is 97.75. What is the minimum down payment?
A) $1,054 B) $1,080 C) $2,108 D) $2,430 |
The correct answer is "D - $2,430 " First, take $108,000 multiplied by 97.75% (maximum loan amount), which equals $105,570. Then take $108,000 - $105,570 = $2,430 minimum down payment.
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Morris Moose intends to put up a fence between his lot and his neighbor's. The fencing comes in six-foot sections. For a fence 120 feet long, how many fence posts will be required?
A) 19 B) 20 C) 21 D) 22 |
The correct answer is "C - 21 " It's easy to divide 120 by 6 for a total of 20 fence posts; just don't forget to add one fence post for the end, for a total of 21.
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A house is valued at $198,000. It is to be insured for 80% of its cost. Insurance will cost $6 per $1,000. What is the annual insurance premium?
A) $95 B) $395 C) $544 D) $950.40 |
The correct answer is "D - $950.40 " $198,000 x .80 = $158,400 insured value. $158,400/1,000 = 158.4 thousands. Then take 158.4 x $6 (per $1,000) = $950.40.
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John Wayne received a net amount of $74,000 from the sale of his house after paying $1,200 in legal and other fees; and 6 percent sales commission. What was the selling price of the house?
A) $80,000 B) $78,440 C) $79,640 D) $79,000 |
The correct answer is "A - $80,000 " First, take $74,000 + $1,200 = $75,200 sales price less commission. $75,200/.94 = $80,000 sales price
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A lending institution will allow its borrowers to spend 28% of their income for housing expense. What will be the maximum monthly payment allowed for a family with an annual income of $57,000, and no other debts?
A) $399 B) $1,330 C) $1,596 D) $1,789 |
The correct answer is "B - $1,330 " To find out the family's monthly income, divide $57,000 by 12, which equals $4,750 monthly income. Take $4,750 x .28 (the amount allowed by the lending institution) = $1,330 is the permissible mortgage payment.
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Kirk works on a 50/50 commission split with his broker. If he lists a house at $156,000, for a 6% commission and sells it for $154,000, how much will he receive?
A) $4,620 B) $4,680 C) $6,550 D) $8,090 |
The correct answer is "A - $4,620 " To solve this problem, take $154,000 (the sale price) and multiply that by .06 (the full commission amount) for a total of $9,240. Half of that, $4,620, is Kirk's share.
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A lot measuring 120' x 200' is selling for $300 a front foot. What is its price?
A) $36,000 B) $48,000 C) $60,000 D) $120,000 |
The correct answer is "A - $36,000 " This is another easy one -- just take 120' x $300 = $36,000.
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A five-acre lot has front footage of 300 feet. How deep is it?
A) 145.2 feet B) 160 feet C) 726 feet D) 876 feet |
The correct answer is "C - 726 feet " Since there are 43,560 feet per acre, take this number multiplied by 5 (acres), which equals 217,800 square feet. Then 217,800/300 = 726 feet deep.
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Larry, Curly, and Moe pooled their savings and bought a vacation home for $125,000. If Larry invested $30,000, and Curly and Moe each contributed $35,000, what percentage of ownership was left for Shep?
A) 15% B) 20% C) 22% D) 25% |
The correct answer is "B - 20% " First, add the contributed amounts ($30,000 + $35,000 + $35,000 = $100,000). Subtract $125,000 - $100,000 = $25,000, which is Shep's contribution. Then $25,000/$125,000 = .20 or 20%
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Jack O. Lantern is interested in knowing what his son owes on his mortgage loan. If Jack knows that the interest portion of their last monthly payment was $391.42, and their interest rate is 11 1/2%, then what was the outstanding balance of their loan before that last payment was made?
A) $43,713 B) $43,000 C) $40,843.83 D) $45,845.22 |
The correct answer is "C - $40,843.83 " First, we'll find out the annual interest, so multiply $391.42 x 12 = $4,697.04. Then divide $4,697.04 by 11 1/2%, or .115 = $40,843.826, or rounded up, $40,843.83.
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Nick L. Berry bought his home on Coventry Lane one year ago, for $98,500. Property in his neighborhood is said to be increasing in value at a rate of 5% annually. If this is true, what is the current market value of Mr. Berry's real estate?
A) $84,964 B) $103,425 C) $93,575 D) $104,410 |
The correct answer is "B - $103,425 " First, figure out the annual increase in value. $98,500 x 5% = $4,925. Since they've lived there one year, add $4,925 to the price paid for the property ($98,500) for its current value of $103,425.
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Joe Schmoe receives a monthly salary of $500, plus a 3% commission on all of his listings that sell, and 2.5% on all his sales. None of the listings that Schmoe took sold last month, but he received $3,675 in salary and commission. What was the value of the property that Schmoe sold?
A) $147,000 B) $127,000 C) $122,900 D) $166,700 |
The correct answer is "B - $127,000 " First, subtract the salary from the total amount earned, so $3,675 - $500 = $3,175 commission. Then take $3,175/.025 = $127,000, which is the value of the property sold.
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Dave leases the 12 apartments in the April Apartments for a total monthly rental of $4,500. If this figure represents an 8% annual return on Dave's investment, what was the original cost of the property?
A) $675,000 B) $690,000 C) $725,000 D) $775,000 |
The correct answer is "A - $675,000 " To find out the annual rental, $4,500 x 12 = $54,000, and $54,000/8% = 675,000, which is the original cost of the property.
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Kim's commission on a sale was $14,100, which was 6% of the sales price. What was the sales price?
A) $175,000 B) $190,000 C) $200,000 D) $235,000 |
The correct answer is "D - $235,000 " Take the commission and divide by the commission rate to arrive at this answer. $14,100/.06 = $235,000 sales price
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In the Rodriguez's state, there is a transfer tax of $2 per $500 sale price or fraction thereof when real property is sold. The Rodriguez's listed their home for $200,000 and accepted an offer for $198,600 from Mr. and Mrs. Clark, who obtained a mortgage loan for $160,000. How much did the Clarks have to pay in transfer tax?
A) $296 B) $594 C) $794 D) $796 |
The correct answer is "D - $796 " To arrive at this answer, divide the sale price by $500. $198,600/500 = 397.2. Now, round that number up to 398, and 398 x $2 =796 transfer tax to be paid.
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The Warrens bought a 1,300-square-foot cooperative apartment for $425,000, which was $15,000 less than the listed price. How much did the apartment cost per square foot?
A) $327 B) $397 C) $398 D) $339 |
The correct answer is "A - $327 " To solve this problem, simply divide $425,000 by 1,300 (sq.ft..) for the answer of $326.92, or rounded up, $327 per square foot.
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A broker sold a property for $250,000. She was paid 6% on the first $100,000, 5% on the next $100,000, and 4% on the balance. How much was she paid altogether?
A) $5,000 B) $6,000 C) $13,000 D) $15,000 |
The correct answer is "C - $13,000 " To figure this out, first take 6% of the first $100,000, which is $6,000. Then take 5% of the next $100,000, which is $5,000. The remainder is $50,000, and 4% of that is $2,000. Add $6,000 + $5,000 + $2,000 = $13,000 total commission.
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An agent was paid $2,500, which was half of the 6% that the broker collected. What was the sale price of the property?
A) $71,248 B) $35,714 C) $35,417 D) $83,333 |
The correct answer is "D - $83,333 " To solve this, take $2,500 x 2 = $5,000. $5,000/6% = $83,333.
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Antoinette Seller agreed to pay a 6% commission to a brokerage company. At the closing table, she received a check for $94,500. What was the selling price of the property?
A) $100,531.91 B) $100,931.51 C) 102,000 D) $103,765 |
The correct answer is "A - $100,531.91 " Subtract the 6% commission from 100% for an amount of 94%. Now take $94,500, divided by 94%, to arrive at the total of $100,531.91.
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A retail space was leased for $1,200 per month. The owner also pays a shopping center 8% of the gross income which is $50,000 monthly as commission. How much does the owner pay annually?
A) $62,400 B) $48,000 C) $14,400 D) $1,200 |
The correct answer is "A - $62,400 " First, figure out the annual rent price, which is $1,200 x 12 = $14,400. Then multiply $50,000 X 12 =$600,000 gross income a year X 8% for the commission amount of $48,000. Then add $48,000 and $14,400 together to get the annual rent with the commission that is due of $62,400.
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A lender negotiated an $82,500 loan, which was 80% of the appraised value. What was the appraised value of the property?
A) $65,800.50 B) $82,250.50 C) $103,125.00 D) $104.842.50 |
The correct answer is "C - $103,125.00 " To solve this, take $82,500/.80 = $103,125.00.
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What is the rate of interest if the mortgagor makes quarterly interest payments of $1,340.63 on a $65,000 loan?
A) 2.25% B) 4.25% C) 6.25% D) 8.25% |
The correct answer is "D - 8.25% " First, figure out the annual interest payments by taking $1,340.63 x 4 = $5,362.52. Now, take $5,362.52/$65,000 for the interest rate of 8.25%.
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A savings and loan agreed to make a $65,000 mortgage at 8% interest for 30 years, and charged three points to negotiate the loan. What was the effective yield to the lender?
A) 8.375% B) 8.735% C) 8.25% D) 8.35% |
The correct answer is "A - 8.375% " To begin with, remember that one point equals 1% of a loan principal. In this case, 1% of $65,000 equals $650. But since the total rate is 8%, we can take 1 over 8 to get the effective additional rate that one point adds to this interest rate. 1/ 8 = .125. Since we have a total of 3 points that the bank is charging, we multiply 3 points by .125 to get .375, and then add this to our original 8%, to give us 8.375% effective yield.
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Joe and Shirley Boomerang applied for a VA loan to purchase a property for $79,500. The property appraised at $79,000. They agreed to pay a 1% loan origination fee. How much did they pay in origination fees?
A) $790 B) $795 C) $990 D) $995 |
The correct answer is "A - $790 " Remember, VA loans are only made on the appraised amount, so the loan amount would be $79,000, and one percent of this is $790.
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Semiannual property taxes of $450 were paid only for the first half of the year. The property sold on July 11, and closed on September 19. If the taxes were prorated between the buyer and seller as of the date of the sale, which of the following is true? Prorate on the basis of 365 days in a year.
A) $252 credit seller and debit buyer B) $252.50 debit seller and credit buyer C) $199.72 debit seller, credit buyer D) $199.72 debit buyer, credit seller |
The correct answer is "C - $199.72 debit seller, credit buyer " First, figure the amount of days for which the taxes were prorated. Since the taxes were paid for the first 6 months you are only concerned with the time from July 1st to September 19th, which is 2 months and 19th days. (July and August each have 31 days + 19 days in September =81 days) $450 X2 =$900 a year divided by 365 days =2.465 a day X 81 days =$199.72
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A lot contains 9/10 of an acre. What is the depth of the lot if the front measures 150'?
A) 216.36' B) 261.36' C) 263.16' D) 267.13' |
The correct answer is "B - 261.36' " First, let's take the 90% of an acre, or 43,560 sq. ft. 43,560 x .90 = 39,204. Then divide 39,204 by 150 to arrive at the depth of the lot, which is 261.36'.
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Kate and Bill secured a loan with a 75% loan-to-value ratio. The interest rate was 7.125% and the term was for 30 years. The first month's interest payment was $477.82. What was the appraised value of the property?
A) $80,475 B) $82,500 C) $83,900 D) $107,300 |
The correct answer is "D - $107,300 " First, let's figure out the annual interest paid by multiplying $477.82 x 12 = $5,733.84. Next, we'll divide $5,733.84 by 7.125% (the interest rate) = $80,475. Next, take $80,475/75% for the total appraised value of $107,300.
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A lot is 275 feet deep. It contains 2/3 of an acre. What is the length of the lot?
A) 158.4' B) 105.60' C) 106.5' D) 112.4' |
The correct answer is "B - 105.60' " First, take an acre, or 43,560 sq. ft. 43,560/3 = 14,520, then multiply that by 2 (for the 2/3 of an acre) for a total of 29,040 sq. ft. Take that number and divide it by the length of the lot for the final answer. So, $29,040/275=105.60 sq.ft..
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If a borrower computed the interest charged for the previous month on his $60,000 loan balance as $412.50, what is the borrower's interest rate?
A) 7.50% B) 7.75% C) 8.25% D) 8.75% |
The correct answer is "C - 8.25% " First, figure out the annual interest amount. $412.50 x 12 = $4,950. Then, take $4,950/$60,000 = .0825, or 8.25%
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Assuming that the listing broker and the selling broker in a transaction split their commission equally, what was the sales price of the property if the commission rate was 6.5% and the listing broker, after paying the selling broker, kept $2,593.50?
A) $39,900 B) $56,200 C) $79,800 D) $89,100 |
The correct answer is "C - $79,800 " $2,593.50 x 2 = $5,187; then divide $5,187 by .065 = $79,800.
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A mortgage lender intends to lend money at 9 3/4% on a 30-year loan. If the loan yield is 10 3/8%, how many discount points must be charged on this loan?
A) 3 B) 4 C) 5 D) 6 |
The correct answer is "C - 5 " The idea behind the more simple method of calculating answers to these types of questions when you are not required to give or use actual dollar amounts is to use a rule of thumb. The rule of thumb in this scenario states that for 30-year loans, regardless of the original loan amount, one point is roughly equal to 1/8 % interest, or .125. So in this example, as long as you've confirmed the term is 30 years, you can see that there is a difference of FIVE "eighths" between 9 3/4% and 10 3/8%. Another way this type of question can appear is as follows: "A savings and loan agreed to make a $65,000 mortgage at 8% interest for 30 years, and charged three points to negotiate the loan. What was the effective yield to the lender?" For this question, once we confirm that the term is 30 years, we simply multiply 3 by 1/8th or 0.125, and come up with .375. Then we add that .375 to the 8% to get an answer of 8.375% as the effective yield.
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A seller wants to net $65,000 from the sale of his house after paying the broker's fee of 6%. The seller's gross sales price will be:
A) $69,149 B) $69,419 C) $69,491 D) $71,409 |
The correct answer is "A - $69,149 " To solve this, $65,000/.94 = $69,149 is the seller's gross sales price.
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A seller wants to net $65,000 from the sale of his house after paying the broker's fee of 6%. The seller's gross sales price will be:
A) $69,149 B) $69,419 C) $69,491 D) $71,409 |
The correct answer is "A - $69,149 " To solve this, $65,000/.94 = $69,149 is the seller's gross sales price.
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How many square feet are in three acres?
A) 43,560 sq. ft. B) 86,040 sq. ft. C) 130,680 sq. ft. D) 135,890 sq. ft. |
The correct answer is "C - 130,680 sq. ft. " This is an easy one! Just take 43,560 (an acre) x 3 = 130,680 sq. ft.
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The current value of a property is $40,000. The property is assessed at 40% of its current value for real estate tax purposes, with an equalization factor of 1.5 applied to the assessed value. If the tax rate is $4 per $100 of assessed, what is the amount of tax due on the property?
A) $640 B) $960 C) $1,600 D) $2,400 |
The correct answer is "B - $960 " First, take $40,000 x .40 = 16,000 x 1.5 = 24,000, then 24,000/100 = 240. Then, 240 x 4 = $960.
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A building was sold for $60,000, with the purchaser putting 10% down and obtaining a loan for the balance. The lending institution charged a 1% loan origination fee. What was the total cash used for the purchase?
A) $540 B) $6,540 C) $6,950 D) $7,450 |
The correct answer is "B - $6,540 " First, take $60,000 x .90 = 54,000 loan x .01 = $540. Next, take $60,000 x .10 = $6,000. Then, add $6,000 + $540 = $6,540.
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A parcel of vacant land has an assessed valuation of $274,550. If the assessment is 85% of market value, what is the market value?
A) $315,000 B) $323,000 C) $345,000 D) $350,000 |
The correct answer is "B - $323,000 " To figure out the market value, divide $274,550/.85 = $323,000
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A parcel of land described as "the NW 1/4 and the SW 1/4 of Section 6, T4N, R8W of the Third Principal Meridian" was sold for $875 per acre. The listing broker will receive a 5% commission on the total sales price. How much will the broker receive?
A) $1,750 B) $14,000 C) $16,000 D) $16,040 |
The correct answer is "B - $14,000 " To solve this problem, first divide 640/4 = 160, and again, 640/4 = 160. Then add these sums together for a total of 320 acres. 320 acres x $875 (per acre sales price) = $280,000, and that multiplied by 5% gives you the broker's commission of $14,000.
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If a house was sold for $40,000 and the buyer obtained an FHA-insured mortgage loan for $38,500, how much money would the buyer pay in discount points if the lender charged four points?
A) $1,540 B) $1,560 C) $1,590 D) $1,690 |
The correct answer is "A - $1,540 " This is an easy one! Points are always paid on the loan amount $38,500 X 4% = $1,540 in discount points.
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The commission rate is 7 3/4% on a sale of $50,000. What is the dollar amount of the commission?
A) $387 B) $787 C) $3,785 D) $3,875 |
The correct answer is "D - $3,875 " To solve this problem, just multiply $50,000 x .0775 = $3,875.
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If the annual net income from a commercial property is $22,000, and the capitalization rate is 8%, what is the value of the property using the income approach?
A) $176,000 B) $275,000 C) $300,000 D) $325,000 |
The correct answer is "B - $275,000 " To solve this, simply take $22,000/.08 = $275,000, which is the value of the property.
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If a borrower must pay $6,000 for points on a $150,000 loan, how many points is the lender charging for this loan?
A) 3 B) 4 C) 5 D) 6 |
The correct answer is "B - 4 " To solve this equation, take $6,000/150,000 = .04 or 4 points.
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How many acres are there in the N 1/2 of the SW 1/4 and the NE 1/4 of the SE 1/4 of a section?
A) 120 B) 160 C) 200 D) 220 |
The correct answer is "A - 120 " To figure out this problem, you first need to multiply 2 x 4, which equals 8. Then 640/8 = 80. Next, 4 x 4 = 16, and 640/16 = 40. Add these two amounts for the total. 80 + 40 = 120 acres.
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If the quarterly interest at 7.5% is $562.50, what is the principal amount of the loan?
A) $22,500 B) 25,000 C) $45,000 D) $30,000 |
The correct answer is "D - $30,000 " First, you need to figure out the annual interest. $562.50 x 4 = $2,250. Divide $2,250 by .075 (interest rate) for the principal amount of $30,000.
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If the mortgage loan is 80% of the appraised value of a house, and the interest rate of 8% amounts to $460 for the first month, then what is the appraised value of the house?
A) $90,000 B) $67,900 C) $69,000 D) $86,250 |
The correct answer is "D - $86,250 " First, you need to figure out the annual interest. $460 x 12 = $5,520 total yearly interest. Now take $5,520/.08 (interest rate) = $69,000 loan. Next, divide $69,000 by 80% for the appraised value of $86,250.
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Jeff purchases a $37,000 property, depositing $3,000 as earnest money. If Jeff obtains a 75% loan-to-value loan on the property, no additional items are prorated and there are no closing costs to Jeff, how much more cash will Jeff need at the settlement?
A) $6,250 B) $6,550 C) $6,650 D) $6,950 |
The correct answer is "A - $6,250 " To arrive at this answer, first figure out the portion not covered by the loan amount, so $37,000 x .25 = $9,250 - $3,000 = $6,250.
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Tommy agrees to buy a house for $84,500. He pays $2,000 as earnest money and obtains a new mortgage loan for $67,600. The purchase contract provides for a Mar. 15 settlement. Tommy and the sellers prorate the present year's real estate taxes of $1,880.96, which have been paid. The buyer is responsible for the day of closing. Tommy has additional closing costs of $1250. Using the "actual number of days" method, how much cash must Tommy bring to the settlement?
A) $16,389 B) $17,655 C) $17,840 D) $19,639 |
The correct answer is "B - $17,655 " First, count the actual number of days from Mar. 16 through Dec. 31, which is 291 days. Next, take $1,880.96/365 = $5.153 (the daily rate). Next, take $5.153 x 292 days = $1,504.97. Next, you'll figure out his down payment, so $84,500 - $67,600 = $16,900 down, and subtract the $2,000 already paid. Your total is now $14,900. Add this to the $1,504.97 + $1,250 for the total of $17,654.77 that he needs to bring to the closing.
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What is the cost of constructing a fence 6 ft., 6 in. high around a lot measuring 90 feet by 175 feet, if the cost of erecting the fence is $1.25 per linear foot, and the cost of materials is $.825 per square foot of fence?
A) $1,765 B) $1,895 C) $2,304 D) $3,505 |
The correct answer is "D - $3,505 " To solve this, first figure out the square footage of the total fence, so 175' + 90' + 175' + 90' = 530'. Then, 530' x $1.25 = $662.50. Next, take 530' x 6.5' = 3,445 sq. ft. x $.825 = $2,842. Add the two amounts together for the final answer. $662.50 + $2,842 = $3,505.
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A building sold for $157,000. The broker divided the 6% commission as follows: 10% to the listing salesperson; 1/2 of the balance to the selling salesperson. What was the listing salesperson's commission?
A) $942 B) $964 C) $1,064 D) $1,124 |
The correct answer is "A - $942 " To find this answer, simply figure out the total commission on the sale price, and take 10% of that amount. $157,000 x 6% = $9,420. 10% of that is $942.
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