Massachusetts Real Estate (Math)
Exam Questions and Answers
Interest Problem (1) - ANSWER-On a loan of $6,000 at 6%, what is the interest due
for 3 months and 5 days?
*Interest for 1 year= 6% x $6,000= $360
Interest for 1 month= $360 divide 12= $30
Interest per day= $30 divide 30= $1.00
= $90 + $5= $95
Interest on R.E. Loans (1 of 2) - ANSWER-What is the interest due for the first and
second months on a mortgage of $12,000 for 20 years with 6% interest per annul if
the principal is paid in equal monthly installments?
*Principal Payments=$12,000 divide 240 months=$50 a month.
Annual interest on $12,000 @ 6%= .06 x $12,000=$720
Interest on R.E. Loans (2 of 2) - ANSWER-Interest for 1 month= $720 divide 12= $60
Principal, after first months payment has been reduced to $11,950.
Annual Interest on $11,950= 0.6 x $11,950=$717
Interest for 1 month=$717 divide 12= $59.75
Month 1=$60, Month 2= $59.75
Depreciation/Appreciation Rules - ANSWER-Straight Line Depreciation- Value of the
improvement
depreciated by an equal amount or percentage each year.
Depreciation Rate- Determined by Dividing economic life (in years) into 100%.
ex. A building with an economic life of 50 years will have a dep. rate of 2%. (100%
divided by 50=2%)
Annual Depreciation - ANSWER-A building which cost $180,000 to construct
depreciates at 4% annually. What is the yearly depreciation in dollars?
.04 x $180,000= $7,200
Total Amount of Depreciation - ANSWER-A building cost $80,000 to reproduce. It is
now 8 years old and has depreciated at a rate of 5% annually. How much has it
depreciated to date?
Accrued dep. rate= 8 x 5%= 40%
Total depreciation= .4 x $80,000
Total depreciation= $32,000
Present Value Depreciation - ANSWER-A building cost $80,000 new. It is now 6
years now and has depreciated at a rate of 4% annually. What is its current value?
Accrued depreciation= 6 x 4%= 24%
Exam Questions and Answers
Interest Problem (1) - ANSWER-On a loan of $6,000 at 6%, what is the interest due
for 3 months and 5 days?
*Interest for 1 year= 6% x $6,000= $360
Interest for 1 month= $360 divide 12= $30
Interest per day= $30 divide 30= $1.00
= $90 + $5= $95
Interest on R.E. Loans (1 of 2) - ANSWER-What is the interest due for the first and
second months on a mortgage of $12,000 for 20 years with 6% interest per annul if
the principal is paid in equal monthly installments?
*Principal Payments=$12,000 divide 240 months=$50 a month.
Annual interest on $12,000 @ 6%= .06 x $12,000=$720
Interest on R.E. Loans (2 of 2) - ANSWER-Interest for 1 month= $720 divide 12= $60
Principal, after first months payment has been reduced to $11,950.
Annual Interest on $11,950= 0.6 x $11,950=$717
Interest for 1 month=$717 divide 12= $59.75
Month 1=$60, Month 2= $59.75
Depreciation/Appreciation Rules - ANSWER-Straight Line Depreciation- Value of the
improvement
depreciated by an equal amount or percentage each year.
Depreciation Rate- Determined by Dividing economic life (in years) into 100%.
ex. A building with an economic life of 50 years will have a dep. rate of 2%. (100%
divided by 50=2%)
Annual Depreciation - ANSWER-A building which cost $180,000 to construct
depreciates at 4% annually. What is the yearly depreciation in dollars?
.04 x $180,000= $7,200
Total Amount of Depreciation - ANSWER-A building cost $80,000 to reproduce. It is
now 8 years old and has depreciated at a rate of 5% annually. How much has it
depreciated to date?
Accrued dep. rate= 8 x 5%= 40%
Total depreciation= .4 x $80,000
Total depreciation= $32,000
Present Value Depreciation - ANSWER-A building cost $80,000 new. It is now 6
years now and has depreciated at a rate of 4% annually. What is its current value?
Accrued depreciation= 6 x 4%= 24%
