Real Estate Math Exam - Practice
Questions
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 - Answer 0.006
(7.2%/12)
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 - Answer $9,100 (Market Value - Loan = Equity) - Duplex: 20k-
12k=8k 4plex: 35k-18k=17k diff: 17k-8k=9k
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? - Answer $3,861
After subtracting $140 escrow fees and 6% commission on gross sales price, a seller
receives $13,584. What is the selling price? - Answer $14,600 (100%x = 13584 + 140 +
6%x; 94%x = 13854+140; 13724/.96 = 14600)
Keith Johnson purchased a property at 20% less than the listed price and later sold the
property for the original listed price. What was a percentage of profit? - Answer 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: - Answer $6,366.67
Assume a real estate salesman sold a residence for $31,000. If the broker's commission
was 6% and the salesman was the receive 45% of the total commission for selling the
property, the salesman would receive: - Answer None of the above (Commission is
exactly $837)
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: - Answer $40,000 (Market
Value - Loan = Equity)
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 expenses and should the capitalization rate of the property be increased to
, Real Estate Math Exam - Practice
Questions
12%, what would be the estimated value of the property? - Answer $220,000 (Value x
Cap Rate = Income)
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; the property taxes are $360 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: - Answer $182
A husband and wife own a vacation home in the mountains. The annual taxes on the
property are $400. Since the total taxes cannot exceed 1% of the full cash value of the
property, the "full cash value" of the property would be: - Answer $40,000 (400/1%)
A house sold for $16350, which amount was 9% more than the cost of the house. The
cost of the house was: - Answer $15,000 (16350/109%)
The Southern Pacific Railroad Company sold ABS Developers three sections of land
that had been divided into 20 acre parcels. 16 sold at $4,000 each and the remainder
sold at $5,000 each. Which of the following was most nearly the total amount realized
by the seller? - Answer $475,000
An acre is to be divided into four equal lots. If the lots are parallel to each other,
rectangular, and 200 feet deep, the width of each lot would most nearly be: - Answer 55
feet (1 acre = 43560ft2; 43560/200 = 217.8. 217.8/4 = 54.45)
A prospect is considering the purchase of an income property which has an operating
statement showing $94,500 deducted from gross income to arrive at the net income.
The deductions amount to 60% of the gross income. If the prospect wants a 12% return
on the purchase price of any investments he makes, what should he pay for the
property? - Answer $504,000 (94500 = 60% x GI. 94500/.6 = 157,500 (GI) GI - Exp =
Net Inc. 157500 - 94500 = 63000. Net income value = Net inc/return rate. 63000/.12 =
525,000)
Richard Rock sold his residence which was unencumbered. Total deductions in escrow
amounted to $215.30 in addition to a broker's commission of 6% of the selling price.
The selling price was the only credit item. Richard Rock received a check for escrow
amounting to $15,290. The selling price was most nearly: - Answer $16495
Mr. and Mrs. Smith acquired a home in 1977 for $48,000. In 1987 they sold it for
$60500 and moved into an apartment unit. During the ten year period of ownership,
permanent improvements totaling $12,750 were made to their house. If Mr. Smith's
income consists entirely of wages, how would the sale affect his 1987 federal income
Questions
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 - Answer 0.006
(7.2%/12)
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 - Answer $9,100 (Market Value - Loan = Equity) - Duplex: 20k-
12k=8k 4plex: 35k-18k=17k diff: 17k-8k=9k
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? - Answer $3,861
After subtracting $140 escrow fees and 6% commission on gross sales price, a seller
receives $13,584. What is the selling price? - Answer $14,600 (100%x = 13584 + 140 +
6%x; 94%x = 13854+140; 13724/.96 = 14600)
Keith Johnson purchased a property at 20% less than the listed price and later sold the
property for the original listed price. What was a percentage of profit? - Answer 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: - Answer $6,366.67
Assume a real estate salesman sold a residence for $31,000. If the broker's commission
was 6% and the salesman was the receive 45% of the total commission for selling the
property, the salesman would receive: - Answer None of the above (Commission is
exactly $837)
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: - Answer $40,000 (Market
Value - Loan = Equity)
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 expenses and should the capitalization rate of the property be increased to
, Real Estate Math Exam - Practice
Questions
12%, what would be the estimated value of the property? - Answer $220,000 (Value x
Cap Rate = Income)
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; the property taxes are $360 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: - Answer $182
A husband and wife own a vacation home in the mountains. The annual taxes on the
property are $400. Since the total taxes cannot exceed 1% of the full cash value of the
property, the "full cash value" of the property would be: - Answer $40,000 (400/1%)
A house sold for $16350, which amount was 9% more than the cost of the house. The
cost of the house was: - Answer $15,000 (16350/109%)
The Southern Pacific Railroad Company sold ABS Developers three sections of land
that had been divided into 20 acre parcels. 16 sold at $4,000 each and the remainder
sold at $5,000 each. Which of the following was most nearly the total amount realized
by the seller? - Answer $475,000
An acre is to be divided into four equal lots. If the lots are parallel to each other,
rectangular, and 200 feet deep, the width of each lot would most nearly be: - Answer 55
feet (1 acre = 43560ft2; 43560/200 = 217.8. 217.8/4 = 54.45)
A prospect is considering the purchase of an income property which has an operating
statement showing $94,500 deducted from gross income to arrive at the net income.
The deductions amount to 60% of the gross income. If the prospect wants a 12% return
on the purchase price of any investments he makes, what should he pay for the
property? - Answer $504,000 (94500 = 60% x GI. 94500/.6 = 157,500 (GI) GI - Exp =
Net Inc. 157500 - 94500 = 63000. Net income value = Net inc/return rate. 63000/.12 =
525,000)
Richard Rock sold his residence which was unencumbered. Total deductions in escrow
amounted to $215.30 in addition to a broker's commission of 6% of the selling price.
The selling price was the only credit item. Richard Rock received a check for escrow
amounting to $15,290. The selling price was most nearly: - Answer $16495
Mr. and Mrs. Smith acquired a home in 1977 for $48,000. In 1987 they sold it for
$60500 and moved into an apartment unit. During the ten year period of ownership,
permanent improvements totaling $12,750 were made to their house. If Mr. Smith's
income consists entirely of wages, how would the sale affect his 1987 federal income
