Realtor Math test
An $80,000 property has a gross income of $10,000 a year. Management fees are $700 annually, and utility costs are $92 per month. What is the approximate rate of return?
All computations must be converted to an annual basis. $92 X 12 = $1,104 utilities, annually. Annual management fees $700 + $1,104 (utilities) = $1,804 annual expense. $10,000 (annual income) - $1,804 (annual expense) = $8,196 net annual income. $8,196 (net income) / 80,000 (value) = .10245 = 10.25% rate of return. The correct answer is: 10.25%
Use the amortization table to solve this problem. We recommend writing this one out manually to get a better visual. A new row begins after each vertical bar (|), and a comma separates each cell. Per $1,000 of loan amount: |Rate, 15 Years, 20 Years, 25 Years, 30 Years |9%, 10.15, 9.00, 8.40, 8.05 |9.5%, 10.45, 9.33, 8.74, 8.41 |10%, 10.75, 9.66, 9.09, 8.78|. Dick and Jane have decided to purchase a new home. The selling price of the house is $165,000 and they will make a down payment of $14,000. The bank will lend money at 10% interest for 30 years. What is the monthly payment (P&I)?
The loan amount is $151,000 ($165,000 less $14,000). Follow the chart where the 10% interest line intersects the 30-year term.. This is $8.78 per $1,000 of loan.. $151,000 X $8.78 / $1,000 = $1,325.78 The correct answer is: $1,325.78
The taxes on a house are $1,260 per year. The taxes are due on January 1 and are paid by the owner. What refund would the owner be entitled to if he sold the house and the taxes were prorated as of September 15? (Assume 30-day months, 360-day years and the buyer pays for settlement date.)
$1,260 divided by 360 = $3.50 daily rate. Days in September: 16 (30 -14). October-December: 90 (3 months X 30 days). Total days: = 106. 106 days X $3.50 = $371.00. The correct answer is: $371.00
A house sells for $47,000 and the buyer made a $2,500 earnest money deposit. The buyer will obtain a 90% loan. The buyer pays four loan discount points and 1% of the sales price for attorney fees, but will receive a prorated tax credit of $400. How much money must the buyer bring to closing?
$47,000 X .90 = $42,300 loan X .04 = $1,692 points. $47,000 X .01 = $470 attorney fees. $47,000 X .10 = $4,700 down payment. $1,692 + $470 + $4,700 = $6,862 - $2,500 deposit - $400 credit of tax. $3,962 cash needed. The correct answer is: $3,962
A house sold for $145,500. The seller paid $3,490 in closing costs and 5% commission to the broker. The seller received $31,400 from the proceeds of the sale after paying off an existing loan. What was the amount of the loan? Select one: a. $94,785 b. $102,025 c. $105,425 d. None of these choices
Commission Paid: $7,275 ($145,500 X 5%). Closing Costs: $3,490. Total Paid out: $10,765. Seller received cash. $31,400 Sales price ($145,500) less pay-outs ($10,765) and cash received ($31,400) = $103,335 required to pay off existing loan. The correct answer is: None of these choices
An owner receives $102 per month for each of 10 apartments. His annual expenses are $1,440. If his rate of return is 10%, what is the value of the property?
$102 X 10 apartments X 12 months = $12,240 annual gross income. $12,240 - 1,440 annual expenses = $10,800 net income. $10,800 net income / .10 rate of return = $108,000 value. The correct answer is: $108,000
Which of the following would result in the highest tax for a property assessed at $88,000? Select one: a. $3.05 per $100 b. 31.5 mills c. 0.0305 per $1 d. $31.48 per $1,000
b. 31.5 mills $88,000 / 100 * $3.05 = $2,684. 31.5 * .001* $88,000 = $2,772. .0305 * $88,000 = $2,684. $88,000 / 1,000 * $31.48 = $2,770. The correct answer is: 31.5 mills
A buyer places a loan on a property for $100,000 at 9.5% interest for 30 years, fully amortized. If the monthly payment is $840.87, what is the balance of the loan after 3 payments have been made?
$100,000 * .095 / 12 = $791.66 paid to interest 1st payment. $840.87 - $791.66 = $49.21 paid to principal 1st payment. $100,000 - $49.21= $99,950.79 loan balance after 1st payment. $99,950.79 * .095 / 12 = $791.27 paid to interest 2nd payment. $840.87 - $791.27 = $49.60 paid to principal 2nd payment. $99,950.79 - $49.60 = $99.901.19 loan balance after 2nd payment. $99,901.19 * .095 / 12 = $790.88 paid to interest 3rd payment. $840.87 - $790.88 = $49.99 paid to principal 3rd payment. $99,901.19 - $49.99 = $99,851.20 loan balance after 3rd payment. The correct answer is: $99,851.20
A house purchased last year for $125,000 was assessed at 40% of market value. This year the assessed value has increased 10% and the tax rate is $2.85 per $100. What are the taxes for the current year?
$125,000 * .40 = $50,000 last year's assessment. $50,000 * 1.10 = $55,000 this year's assessment. $55,000 * $2.85 / 100 = $1,567.50. The correct answer is: $1,568
What is the cost to build a sidewalk 3' wide and 4" deep around the inside perimeter of a lot 100' X 150', if the price of concrete is $24 a cubic yard. Draw a picture.
100' + 100' + 144' + 144' = 488'. 144' is used instead of 150' because there is a 3' overlap at each end of two sides. 488' * 3' = 1,464 square feet. 1,464 sq ft * .333 (4" is 1/3 of a foot) = 487.5 cubic feet. 487.5 / 27 = 18.056 cubic yards. 18.056 * $24 = $433.34. The correct answer is: $433.34
Use the amortization table to solve this problem. We recommend writing this one out manually to get a better visual. A new row begins after each vertical bar (|), and a comma separates each cell. Per $1,000 of loan amount: |Rate, 15 Years, 20 Years, 25 Years, 30 Years |9%, 10.15, 9.00, 8.40, 8.05 |9.5%, 10.45, 9.33, 8.74, 8.41 |10%, 10.75, 9.66, 9.09, 8.78|. Lenders are offering 15-year loans at 9% or 30-year loans at 10%. If a homebuyer wants to borrow $158,000, what is the difference in the monthly payment for these two types of loans?
9% loans for 15 years require $10.15 per $1,000 or $1,603.70 per month. 10% loans for 30 years require $8.78 per $1,000 or $1,387.24 per month. Difference = $216.46. The correct answer is: $216.46
A shop owner agrees to $1,350 per month base rent plus 2% of annual gross sales over $80,000. Last year the owner paid a total of $22,000 for rent. What were the gross sales of the shop?
Base rent = $1,350 per mo. * 12 = $16,200. Total rent = $22,000 - $16,200 = $5,800 for excess sales. $5,800 / .02 = $290,000 in sales over $80,000. $80,000 + $290,000 = $370,000 annual gross sales. The correct answer is: $370,000
G obtains an 8% loan for $2,400. The loan is to be repaid in four payments of $600 each, plus interest at six-month intervals. How much interest will G pay during the term of the loan?
Remember the outstanding loan balance changes with each $600 payment. $2,400 X 8% / 2 = $96. Interest 1st six months. $1,800 X 8% / 2 = $72. Interest 2nd six months. $1,200 X 8% / 2 = $48. Interest 3rd six months. $600 X 8% / 2 = $24. Interest 4th six months. Total Interest = $240. The correct answer is: $240
A property sells for $150,000. The buyer will make a 20% down payment and pay the lender three points. How much will the buyer pay for points?
Selling price = $150,000 - $30,000 down payment = $120,000 loan. Loan amount $120,000 * 3% = $3,600 for points. Remember, a point is 1% of the loan amount. The correct answer is: $3,600
A lot measures 105' square. Zoning requires a front setback of 30', rear setback of 25', and side setbacks of 15'. What is the maximum square footage, of a single story structure, that could be built on this property? Draw a picture.
105 - 55 (total of front & rear setbacks) = 50 deep. 105 - 30 (total of side setbacks) = 75 wide. 50 * 75 (maximum structure) = 3,750 sq. feet. The correct answer is: 3,750
On a loan balance of $15,625 the next monthly payment will include $112.90 to be applied to interest. What is the interest rate of the loan?
$112.90 * 12 = $1,354.80 annual interest. $1,354.80 / $15,625 (loan amount) = .08670 of 8.67% interest. The correct answer is: 8.67%
Annual taxes of $2,160 have been paid. The property sells and closes on August 15. What is the settlement sheet entry to prorate the taxes? Select one: a. Buyer - $810 Credit. Seller - $810 Debit. b. Buyer - $1,350 Debit. Seller - $810 Credit. c. Buyer - $810 Debit. Seller - $1,350 Debit. d. Buyer - $816 Debit .Seller - $816 Credit.
Annual taxes have been paid, therefore the seller gets a credit. $2,160 annual taxes / 360 days = $6.00 per day Aug 15 to Aug 30 = 16 days + 120 days (4 months) = 136 days $6.00 * 136 days = $816 credit to the seller The correct answer is: Buyer - $816 Debit .Seller - $816 Credit.
If the seller of a house agrees to pay the broker a 6% commission on the first $10,000 and 3.5% commission for all money received over that amount, what was the sale price of the house if the broker collected $946.50 in commissions?
Commission earned on 1st $10,000 = $600.00 ($10,000 X .06). Total commission $945.50 - 600 = $346.50 commission on remainder $346.50 / .035 = $9,900 + $10,000 = $19,900 sale price. The correct answer is: $19,900
A salesperson sells property, listed by another broker, for $84,500. If the listing broker is to receive 50% of the 6% commission, how much will the salesperson receive if he earns 40% of his broker's share?
$84,500 (sales price) X 6% = $5,070 total commission. $5,070 X 50% = $2,535 to selling broker. $2,535 X 40% = $1,014 to salesperson. The correct answer is: $1,014
A house sells for $54,000 but is assessed at $39,500. Taxes are calculated at $.92 per $100. What is the semi-annual tax bill?
Taxes are based on assessed value not sales price or appraised value. $39,500 assessed value * $.92 per $100 = $363.40 annual taxes. The question asks for the semi-annual taxes $363.40 / 2 = $181.70. The correct answer is: $181.70
Real estate taxes are assessed on the basis of the calendar year but are actually paid on June 30 of each year. The annual taxes are $2,340. If the property sells and closing is on March 15, what is the settlement sheet entry for the proration of the taxes?
When the tax bill comes in June, the buyer will have to pay it. There were 2 months and 14 days that buyer did not own the property (day of closing is the buyer's), so he is entitled to a credit for that period, and the seller will be charged (debited). Closing is on March 15, so at closing the taxes have not been paid. Annual taxes of $2,340 / 360 days (30 days * 12) = $6.50 per day. $6.50 * 74 days (Jan. 1- March 14) = $481.00 credit to buyer. The correct answer is: Credit to buyer: $481.00
Each unit in a 20-unit apartment building rents for $750 per month. There is a 0% vacancy rate. The landlord increases the rent 5% and creates a 5% vacancy rate. What effect does this have on the monthly gross income of the building?
Units Before: 20, Units After: 2. Occupancy rate Before: 100%, Occupancy rate After: 95%. Units rented Before: 20, Units rented After: 19. Rent Before: $750, Rent After: $787.50. Formula: Units x Occupancy rate x Units rented x Rent x Units rented. Before: 20 x 100 x 20 x 750 x 20 = $15,000. After: 2 x 95 x 19 x 787.50 x 19 = $14,962.50. $15,000 - $14,962.50 = $37.50 net change. $37.50 / $15,000 = .0025 or .25%. The correct answer is: Income is decreased by .25% or $37.50.
If one rectangular lot with 1350' of frontage contains 25 acres, how many acres would the lot next to it contain if it has a 900' frontage and is the same width as the first lot?
Area = Length X Width. Lot 1: 43,560 (sq. ft. in acre) X 25 acres = 1,089,000 sq. ft. We know that 1,089,000 sq. ft. = Width X 1,350' (length). Therefore: 1,089,000 / 1,350 = Width or 806.67. The problem told us that the lots were the same width. Lot 2: Area = 806.67' (width) x 900' (length) = 726,000 sq. ft. Therefore: 726,000 (area) 43,560 = 16.67 acres. The correct answer is: 16.67 acres
A homeowner is having new carpet and pad installed in his house. The area to be carpeted measures 16'6" X 15'. The cost of the carpet is $19.95 per square yard and the padding is an additional $5.00 per square yard. How much will it cost to install the carpeting?
The area to be carpeted is 16.5' X 15' or 247.5 sq. ft. There are 9 sq. ft. in one sq. yard. 247.5 sq. ft. / 9 = 27.5 sq. yds of carpet and pad. 27.5 sq. yds. X $24.95 (carpet $19.95 + pad $5.00) = $686.13. The correct answer is: $686.13
Sally bought a piece of property that was currently being rented at $990 per month. Comparable properties in the area are operating on a GRM of 116. Based on the comparable, what is the value of Sally's property?
The formula is GRM = value / rent In this problem the GRM is 116 and the rent is $990. Therefore the value = $990 * 116 = $114,840 value. The correct answer is: $114,840
Use the amortization table to solve this problem. We recommend writing this one out manually to get a better visual. A new row begins after each vertical bar (|), and a comma separates each cell. Per $1,000 of loan amount: |Rate, 15 Years, 20 Years, 25 Years, 30 Years |9%, 10.15, 9.00, 8.40, 8.05 |9.5%, 10.45, 9.33, 8.74, 8.41 |10%, 10.75, 9.66, 9.09, 8.78|. A couple can qualify for a monthly loan payment of $1,200 (P&I). In addition to closing costs, they will make a $10,000 down payment. If lenders are offering 20-year loans at 9.5%, what is the maximum amount that they can spend on a house? (To the nearest $100)
Using the table, 20-year loans at 9.5% require $9.33 per $1,000. $1,200 (monthly) / $9.33 x $1,000 = $128,617 loan amount. $128,617 loan + $10,000 down = $138,617 purchase price, which would be rounded down to $138,600. The correct answer is: $138,600
A property was purchased for $115,000 and has appreciated 8% each year over the value the previous year for the last five years. What is its present value?
Year 1: 115,000 * 1.08 = 124,200.00. Year 2: 124,200* 1.08 = 134,136.00. Year 3: 134,136 * 1.08 = 144,866.88. Year 4: 144,866.88 * 1.08 = 156,456.23. Year 5: 156,456.23 * 1.08 = 168,972. Present Value: = $168,973 The correct answer is: $168,973
Taxes on a property are $2,100 per year. What is the value of the property if the tax rate is $3.50 per hundred on an assessment of 40% of fair market value?
$2,100 / $3.50 x 100 = $60,000 assessed value and is 40% of market value. Therefore $60,000 / .40 = $150,000 market value. The correct answer is: $150,000
A purchaser agrees to buy a house for $47,000, obtaining a 90% loan. The buyer makes an earnest money deposit of $2,500. If attorney fees are $225, how much will the buyer need to bring to closing?
$47,000 x .90 = $42,300 loan amount. $47,000 - 42,300 = $ 4,700 down payment - $2,500 deposit = $2,200. Subtract the deposit because that has already been paid. $2,200 + $225 attorney fee = $2,425. The correct answer is: $2,425
If a salesperson is paid a salary of $200 and earns a 3% commission on all sales, how many dollars worth of real estate would he have to sell in a month to make $750?
$750 desired income - $200 salary = $550 earned in commissions. $550 / .03 = $18,333. The correct answer is: $18,333
The real estate taxes for the calendar year are $1,290 and have been paid. The property sells and closing takes place on June 10. When the taxes are prorated, which of the following is the correct settlement sheet entry? Select one: a. $573.34 credit to the seller. b. $573.34 credit to the buyer. c. $719.58 credit to the buyer. d. $719.58 credit to the seller.
$1,290 annual taxes / 360 days (30 day months) = $3.58 per day. The seller is entitled to a credit from closing to the end of the year. June 10 to June 30 = 21 days. July to Dec - 6 months * 30 days = 180 days + 21 days = 201 days. $3.58 * 201 days = $719.58 credit to seller. The correct answer is: $719.58 credit to the seller.
A lot measuring 250' * 609.84' is sold at a price of $5,000 per acre. What was the selling price?
250' * 609.84' = 152,460 sq. ft. / 43,560 (sq. ft per acre) = 3.5 acre. 3.5 acre X $5,000 per acre = $17,500. The correct answer is: $17,500
The plans for a house indicate a scale of 1/4" = 1 foot. If the living room is shown as 8 1/2" by 6 3/4", what is the cost to carpet the room if carpet is $2.70 per square yard?
On a ruler there would be 4' to each inch 8.5" * 4 = 34 feet 6.75" * 4 = 27 feet 34' * 27' = 918 square feet. 918 / 9 sq. ft. per yd = 102 square yards. 102 * $2.70 = 275.4 = $275.40. The correct answer is: $275.40
An apartment house owner receives $4,800 per year net income from his investment of $60,000. What is his annual rate of return on this investment?
I / V = R $4,800 / $60,000 = .08 or 8%. The correct answer is: 8.0%
A salesperson received 1.5% commission on all sales and listings sold. What was the total value of the real estate handled last year if the agent's income was $33,000?
If 1% (.015) X Total value = $33,000, then $33,000 / .015 = Total Value. Total value handled = $2,200,000. The correct answer is: $2,200,000
An investment earns semi-annual interest of $360, and the interest rate is 9% per year. How much money is invested?
$360 semi-annual interest X 2 = $720 annual interest $720 annual interest / .09 = $8,000 invested. The correct answer is: $8,000
A house that cost $140,000 is assessed at 45% of its value. What are the annual taxes, if the tax rate is $3.20 per thousand dollars? Select one: a. $189 b. $198 c. $202 d. $246
$140,000 X 45% = $63,000 assessed value $63,000 X $3.20 / $1,000 = $201.60 or $202 tax. The correct answer is: $202
If an owner receives $225 weekly gross income from each of 16 apartments and pays $3,120 in monthly expenses. What is the rate of return on the investment of $1,200,000?
$225 rent per apartment x 16 (# of apartments) = $3,600 weekly income. $3,600 weekly rent * 52 weeks = $187,200 annual income. $3,120 monthly expenses * 12 months = $37,440 annual expense. $187,200 gross income - $37,440 expenses = $149,760 net income. $149,760 / $1,200,000 = .1248 or 12.5%. The correct answer is: 12.5%
What is the annual interest rate on an $8,000 loan if the interest payments are $80 per quarter on the full amount?
$80 per quarter X 4 = $320 annual interest $320 / $8,000= .04 or 4% annual interest rate. The correct answer is: 4%
A seller walked away from closing with $140,023. She had paid settlement costs of $4,220 and a 6% commission. What was the selling price of the property?
Sales price = commission + (net to seller and expenses). Sales price (100%) = 6% + 94%. 100% = 6% + $140,023 + $4,220 ($144,243). $144,243 (94%) = sell price - 6% commission. $144,243 / .94 = $153,450 sell price. The correct answer is: $153,450
What is the number of square feet in a lot (trapezoid) that measures 95' along the front, 105' along the back, and 145' from front to back?
Set up problem: B1 + B2 / 2 X H = Area. 95 + 105 / 2 = 100. 100 X 145 = 14,500 square feet. The correct answer is: 14,500
A seller wishes to net $30,000 on the sale of his house after paying the balance of $6,000 on his loan, expenses of $472, and a broker commission of 6%. What is the price of the house?
$30,000 + $6,000 + $472 = $36,472 (net + expenses). 100% - 6% = 94%. $36,472 / .94 = $38,800 sale price. The correct answer is: $38,800
A property sold for $40,625 with an 80% loan at 9% interest. If the monthly payment is $325, what is the remaining balance on the loan at the end of two months?
$40,625 X .80 = $32,500 loan. $32,500 X .09 / 12 = $243.75 interest, 1st payment. $325 - $243.75 = $81.25 principal, 1st payment. $32,500 - $81.25 = $32,418.75 loan balance after 1st payment. $32,418.75 X .09 / 12 = $243.14 interest, 2nd payment. $325 - $243.14 = $81.86 principal, 2nd payment. $32,418.75 - $81.86 = $32,336.89 balance, after 2nd payment. The correct answer is: $32,337
A property sells for $80,000 and is assessed at 70% of market value. The county tax rate is $4 per $100. What is the annual property tax?
Tax = Assessed Value X Tax Rate. $80,000 X .70 = $56,000 Assessed Value. $56,000 X $4 / 100 = $2,240 Taxes. The correct answer is: $2,240
A developer owns a tract of land that measures 2,000' by 1,775'. He plans to develop the tract into two-acre building lots. The county requires that he dedicate 13% for streets and public use and another 7% must remain in its natural state. How many building lots will the developer be able to create?
The tract of land contains: 3,550,000 sq. ft. (2,000' by 1,775'). 20% must be dedicated: 710,000 sq. ft. Available to develop: 2,840,000. Each lot will require 87,120 sq. ft. (43,560 * 2) 2,840,000 / 87,120 = 32.589 or 32 building lots. You must round down to 32, otherwise each lot will be less than 2 acres . The correct answer is: 32
A lender's policy states that monthly payments for principal and interest cannot exceed 25% of the borrower's gross monthly income. If the borrower can qualify for a loan payment of $1,000, what is the minimum income required to support this payment? Select one: a. $2,000 b. $3,000 c. $5,000 d. None of these choices
We know that the monthly income X 25% cannot exceed $1,000. Therefore, $1,000 / 25% (.25) will equal monthly income. $1,000 / .25 = $4,000. The correct answer is: None of these choices
A $200,000 property is assessed at 60% of value. If the rate is $2.40 per hundred, what are the monthly taxes? Select one: a. $240 b. $400 c. $2,880 d. $4,800
$200,000 * .60 = $120,000 assessed value. $120,000 * 2.40 / 100 = $2,880 annual taxes. $2,880 / 12 = $240 monthly tax. The correct answer is: $240
What is the present balance of an 8.75% loan if the next monthly interest payment is $1,531.25?
$1,531.25 * 12 = $18,375 annual interest. $18,375 / .0875 = $210,000 loan balance. The correct answer is: $210,000
An investor pays $340,000 for an eight-unit apartment building. Each unit rents for $1,500 per month. Annual expenses are $96,000. What is the investor's approximate rate of return?
$1,500 X 8 units X 12 months = $144,000 Gross Income. $144,00 - $96,000 Expenses = $48,000 Net Income. $48,000 / $340,000 = 14.12% Rate of Return or 14%. The correct answer is: 14%
What is the area of a lot that measures 120' by 164'?
Area = Length X Width Area = 164' X 120' = 19,680 sq. ft. Read your calculator carefully! The correct answer is: 19,680 sq. ft.
An office building producing a gross annual income of $45,000 is purchased for $225,000. If the only expense is an 11.5% interest payment on a $200,000 term loan, what is the owner's rate of return on equity?
Solution: $200,000 * .115 = $23,000 annual interest expense $45,000 (income) - $23,000 (expense) = $22,000 net income. $225,000 (value) - $200,000 (debt) = $25,000 equity. $22,000 (income) / $25,000 equity = 0.88 or 88% return on equity. The correct answer is: 88.0%
Tom built a 28' X 140' rambler, with garage. The average cost of construction was $11.25 per square foot. What is the total cost of the house?
28' X 140' = 3,920 sq. ft of construction. 3,920 X $11.25 (per sq. ft.) = $44,100 total cost. The correct answer is: $44,100
An owner receives $37,500 per year net income on an investment of $495,000. What is the owner's capitalization rate?
Income / value = % return. $37,500 / $495,000 = .0757575 or 7.6%. The correct answer is: 7.6%
A rectangular lot with 1,250' of frontage contains 40 acres. The adjacent lot has a front footage of 2,000'. If both lots are the same depths, how many acres are in the second lot?
Lot 1: 40 X 43,560 = 1,742,400 square feet. 1,742,400 / 1250 (1st frontage) = 1,393.92 (depth of both lots). Lot 2: 2,000 (front) X 1,393.92 (depth) = 2,787,840 square feet. 2,787,840 / 43,560 = 64 acres. The correct answer is: 64
Use the amortization table to solve this problem. We recommend writing this one out manually to get a better visual. A new row begins after each vertical bar (|), and a comma separates each cell. Per $1,000 of loan amount: |Rate, 15 Years, 20 Years, 25 Years, 30 Years |9%, 10.15, 9.00, 8.40, 8.05 |9.5%, 10.45, 9.33, 8.74, 8.41 |10%, 10.75, 9.66, 9.09, 8.78|. A buyer wants to borrow $120,000 at 9.5% interest. The buyer can afford to pay $1,200 per month. What is the shortest possible term of loan the buyer can obtain?
Follow the chart along the row for 9.5%. Then multiply the rate shown under each amount column by the loan amount ($120,000). $120,000 X 10.45 / $1,000 = $1,254 per month. The buyer cannot afford this. $120,000 X 9.33 / $1,000 = $1,119 per month. The buyer can afford this. Therefore, the shortest term loan, within their budget, is 20 years. The correct answer is: 20 years
Z purchases a vacant lot for $28,000 and constructs a house on the lot at a cost of $250,000. Later Z wants to sells the property and make 3% profit on the land and a 30% profit on the house. What is the least amount that Z could sell the property for and realize his desired profit?
Lot cost $28,000 X 3% = $840 profit on lot. House cost $250,000 X 30% = $75,000 profit on house. Total cost of lot and house = $278,000. $840 + $75,000 + $278,000 = $353,840 selling price. The correct answer is: $353,840
What price must a house sell for if the seller is to net $28,000 after paying $1,500 in settlement fees and the broker's commission of 6%?
Start by adding the items the seller needs to pay. $28,000 + $1,500 = $29,500 (net to seller + expenses). If the selling price is 100% & the commission is 6%, the seller pay-outs are 94%. The selling price X 94% will equal the seller pay-outs. Therefore, $29,500 (seller pay-outs) / 94% (.94) will equal the selling price. $29,500 / .94 = $31,382.97 or $31,383 sales price. The correct answer is: $31,383
What would be the cost to build a sidewalk 3' wide and 4" deep around the outside perimeter of a lot 100' X 150', if the price of concrete is $24 a cubic yard.
Since the sidewalk is on the outside of the property lines this means that there would be four sidewalks on the outside of each dimension of the property. They would be 156' + 156' + 100' + 100' for a total length of the sidewalks of 512 feet. (We only add 6 feet to two of the dimensions so we don't count the corners twice. We could have said it would be 150' + 150' + 106' + 106' which would also come to 512 feet. If we did 156' + 156' + 106' + 106' we would be counting the corners twice.) Since each sidewalk is 3' wide, there is a total square footage of 512 X 3 = 1,536 square feet. Since the sidewalk is 4" thick (1/3 of a foot) the cubic feet of sidewalk is 1,536 X .333 = 511.49 cubic feet (rounded). Since the price is per cubic yard, we need to convert the cubic feet to cubic yards. There are 27 cubic feet in a cubic yard (3 X 3 X 3), so 511.49 divided by 27 = 18.94 cubic yards. 18.94 cubic yards X 24 = $454.56. (If your answer was a few cents off, the difference is a rounding issue, just pick the closest choice.) The correct answer is: $454.56
A seller wishes to net $32,500 on the sale of his house after paying the balance of $65,500 on his loan, expenses of $422.50, and a broker's commission of 5%. What is the selling price of the house?
Start with seller pay-outs. $32,500 + $65,500 + $422.50 = $98,422.50. 100% (sell price) - 5% (commission) = 95% (to be paid out). $98,422.50 / .95 = $103,603 sales price. The correct answer is: $103,603
Use the amortization table to solve this problem. We recommend writing this one out manually to get a better visual. A new row begins after each vertical bar (|), and a comma separates each cell. Per $1,000 of loan amount: |Rate, 15 Years, 20 Years, 25 Years, 30 Years |9%, 10.15, 9.00, 8.40, 8.05 |9.5%, 10.45, 9.33, 8.74, 8.41 |10%, 10.75, 9.66, 9.09, 8.78|. Assume you borrow $110,000 at 9% for 25 years. How much interest will be paid if the loan is paid off at the scheduled maturity date?
The amortization table indicates a monthly payment of $8.40 per $1,000. $110,000 x $8.40 = $924 per month. $924 x 300 (25 years at 12 payments per year) = $277,200. $277,200 is the total you would pay, but $110,000 of it is for principal. $277,200 - $110,000 = $167,200 total interest paid. The correct answer is: $167,200