Perry Real Estate College - National
Practice Tests 6-10
10.1 A licensee sells 5/6 of an acre for $28,000, and receives a 6% commission. If she splits
with her dealer 50-50, what did she receive in line with rectangular foot?
A. $.023 / SF
b. $.046 / SF
c. $.037/ SF
d. $.002 / SF - ANS-10.1 (a) $.023 / SF
5/6ths of an acre = (five x forty three,560 SF) / 6, or 36,three hundred SF. Her commission
changed into (.06 x $28,000) x .50, or $840. $,three hundred SF = $.023 / SF.
10.10 A home appreciated 2 2/three% three hundred and sixty five days, then five 1/5% the next
year, then 7 1/four% the third 12 months. What became the common appreciation over the
3-year duration expressed as a decimal?
A. Five.04%
b. 15.24%
c. 7.56%
d. 4.Eight% - ANS-10.10 (a) 5.04%
First, convert to decimals: 2 2/3 % = 2.67%; five 1/5% = five.2%; 7 1/four% = 7.25%. Thus
overall appreciation = (2.Sixty seven% + 5.2% + 7.25%), or 15.12%. Divide by means of three to
derive the common: 15.12% / three = five.04%
10.11 A property owner paid $185,000 for a residence 3 years ago. The house sells today for
$239,000. How a whole lot has the belongings favored?
A. 23%
b. Seventy seven%
c. 29%
d. 123% - ANS-10.11 (c) 29%.
Appreciation as a in keeping with cent can be predicted by way of (1) subtracting the predicted
current marketplace value from the rate originally paid (239,000 - 185,000 = 54,000) and (2)
dividing the result via the authentic price (fifty four,,000 = . 29 or 29%).
,10.12 Seller Frank receives a proposal of $290,000 on a belongings he listed at $308,000. How
tons is the provide as a percentage of the listing price?
A. 87%
b. 91%
c. 94%
d. 106% - ANS-10.12 (c) ninety four%
To find the percent of list charge the provide is, divide the offer through the list fee. In this
question the offer is $290,000 and the listing fee is $308,000. $290,000/$308,000 = ninety
four%
10.13 A property is being appraised using the earnings capitalization approach. Annually, it has
capability gross profits of $30,000, vacancy and credit score losses of $1,500, and working
prices of $10,000. Using a capitalization price of nine%, what's the indicated fee (to the nearest
$1,000)?
A. $206,000
b. $167,000
c. $222,000
d. $180,000 - ANS-10.13 (a) $206,000.
Remember the method V = I / R where V is fee, I is annual income, and R is the cap charge.
Variations of this are: R = I / V in fixing for the cap charge, and I = V x R in fixing for earnings.
Here, first perceive internet earnings via subtracting out vacancy and charges. Then divide by
using the capitalization rate. Thus, ($30,000 - 1,500 - 10,000) / nine% = $205,555, or $206,000
rounded.
10.14 If gross earnings on a belongings is $seventy five,000, internet profits is $30,000 and the
cap price is 8%, the cost of the belongings the use of the profits capitalization approach is
a. $625,000
b. $375,000
c. $3,750,000
d. $937,500 - ANS-10.14 (b) $375,000.
Value = Income / Cap fee. Thus, V= $30,000 / .08 = $375,000.
10.15 The roof of a assets price $sixteen,000. The financial existence of the roof is twenty
years. Assuming the directly-line approach of depreciation, what is the depreciated price of the
roof after 3 years?
A. $sixteen,000
b. $thirteen,600
,c. $18,four hundred
d. $12,000 - ANS-10.15 (b) $thirteen,six hundred.
First derive the once a year depreciation that's the fee divided with the aid of the financial
existence. Then multiply annual depreciation instances the number of years to perceive general
depreciation. Remember to subtract depreciation from the original value if the query asks for the
finishing price. Thus, ($sixteen,000 / twenty years x 3 years) = $2,four hundred general
depreciation. The finishing price is $16,000 -2,400, or $thirteen,six hundred.
10.16 Lee needed to document his home workplace depreciation for the tax 12 months. He has
a 2,500 SF domestic and a 500 SF workplace region. Lee paid $280,000 for his home, and he
figures the land element carries about 25% of that price. If Lee depreciates on a 39-yr
foundation, how plenty can he write off for his home office depreciation in line with yr?
A. $1,077
b. $1,436
c. $five,384
d. $2,108 - ANS-10.Sixteen (a) $1,077
First, Lee's depreciable basis, without the land, is $280,000 x 75%, or $210,000. The annual
depreciation for the complete domestic is ($210, years), or $five,384.Sixty one. Second,
his office is 20% of the house (500 sf / 2,500 sf). Therefore Lee can take annual depreciation of
($five,384.61 x 20%), or $1,076.Ninety two.
10.17 A belongings is being appraised by using the fee approach. The appraiser estimates that
the land is worth $80,000 and the replacement fee of the upgrades is $350,000. Total
depreciation from all reasons is $54,000. What is the indicated value of the assets?
A. $296,000
b. $456,000
c. $324,000
d. $376,000 - ANS-10.17 (d) $376,000.
Cost Approach components: Land + (Cost of Improvements + Capital Additions - Depreciation)
= Value. Thus you have $80,000 + ($350,000 - fifty four,000), or $376,000.
10.18 An rental owner paid $500,000 for her complex five years in the past. An appraiser at that
point valued the land @ $a hundred,000, but land has liked 25% over this period. The investor
has used a 40- 12 months directly-line depreciation approach to depreciate the belongings.
What is its present day price the usage of the fee technique?
A. $437,500
b. $462,500
c. $475,000
, d. $546,875 - ANS-10.18 (c) $475,000
Use the identical Cost Approach components: Land + (Cost of Improvements + Capital
Additions - Depreciation) = Value. The land is well worth (100,000 x one hundred twenty five%),
or $125,000. Remember, you can not depreciate the land, only the value of the enhancements.
Therefore, annual depreciation is ($400,000 / forty), or $10,000. Total depreciation is ($10,000 x
five years), or $50,000. Thus the cost is ($one hundred twenty five,000 + 400,000 - 50,000), or
$475,000.
10.19 An condominium building that currently bought for $four hundred,000 had monthly gross
rent receipts of $three,2 hundred. What is its month-to-month gross rent multiplier?
A. Eighty
b. .01
c. A hundred and ten
d. A hundred twenty five - ANS-10.19 (d) one hundred twenty five.
Use the components: GRM = Price / Monthly Rent. Thus, $four hundred,000 / $three,two
hundred = one hundred twenty five.
10.2 Lots in the South Hyde subdivision are selling for approximately $.50 / SF. The
Grandersons need to build a 2,500 SF home on a 1.5 acre corner lot. The custom builder can
construct the home for $a hundred thirty five / SF. What will the finished assets cost the
Grandersons?
A. $359,a hundred and seventy
b. $370,one hundred seventy
c. $32,670
d. $374,070 - ANS-10.2 (b) $370,170
The land charges $.50 x forty three,560 SF/ac. X 1.5 ac, or $32,670. The home will value $one
hundred thirty five / SF x 2,500, or $337,500. The general assets will cost $370,one hundred
seventy.
10.20 A rental home has monthly gross earnings of $three,three hundred. A suitable gross
income multiplier derived from marketplace statistics is 14.7. What expected sale charge (to the
closest $1,000) is indicated?
A. $297,000
b. $486,000
c. $582,000
d. $519,000 - ANS-10.20 (c) $582,000.
Practice Tests 6-10
10.1 A licensee sells 5/6 of an acre for $28,000, and receives a 6% commission. If she splits
with her dealer 50-50, what did she receive in line with rectangular foot?
A. $.023 / SF
b. $.046 / SF
c. $.037/ SF
d. $.002 / SF - ANS-10.1 (a) $.023 / SF
5/6ths of an acre = (five x forty three,560 SF) / 6, or 36,three hundred SF. Her commission
changed into (.06 x $28,000) x .50, or $840. $,three hundred SF = $.023 / SF.
10.10 A home appreciated 2 2/three% three hundred and sixty five days, then five 1/5% the next
year, then 7 1/four% the third 12 months. What became the common appreciation over the
3-year duration expressed as a decimal?
A. Five.04%
b. 15.24%
c. 7.56%
d. 4.Eight% - ANS-10.10 (a) 5.04%
First, convert to decimals: 2 2/3 % = 2.67%; five 1/5% = five.2%; 7 1/four% = 7.25%. Thus
overall appreciation = (2.Sixty seven% + 5.2% + 7.25%), or 15.12%. Divide by means of three to
derive the common: 15.12% / three = five.04%
10.11 A property owner paid $185,000 for a residence 3 years ago. The house sells today for
$239,000. How a whole lot has the belongings favored?
A. 23%
b. Seventy seven%
c. 29%
d. 123% - ANS-10.11 (c) 29%.
Appreciation as a in keeping with cent can be predicted by way of (1) subtracting the predicted
current marketplace value from the rate originally paid (239,000 - 185,000 = 54,000) and (2)
dividing the result via the authentic price (fifty four,,000 = . 29 or 29%).
,10.12 Seller Frank receives a proposal of $290,000 on a belongings he listed at $308,000. How
tons is the provide as a percentage of the listing price?
A. 87%
b. 91%
c. 94%
d. 106% - ANS-10.12 (c) ninety four%
To find the percent of list charge the provide is, divide the offer through the list fee. In this
question the offer is $290,000 and the listing fee is $308,000. $290,000/$308,000 = ninety
four%
10.13 A property is being appraised using the earnings capitalization approach. Annually, it has
capability gross profits of $30,000, vacancy and credit score losses of $1,500, and working
prices of $10,000. Using a capitalization price of nine%, what's the indicated fee (to the nearest
$1,000)?
A. $206,000
b. $167,000
c. $222,000
d. $180,000 - ANS-10.13 (a) $206,000.
Remember the method V = I / R where V is fee, I is annual income, and R is the cap charge.
Variations of this are: R = I / V in fixing for the cap charge, and I = V x R in fixing for earnings.
Here, first perceive internet earnings via subtracting out vacancy and charges. Then divide by
using the capitalization rate. Thus, ($30,000 - 1,500 - 10,000) / nine% = $205,555, or $206,000
rounded.
10.14 If gross earnings on a belongings is $seventy five,000, internet profits is $30,000 and the
cap price is 8%, the cost of the belongings the use of the profits capitalization approach is
a. $625,000
b. $375,000
c. $3,750,000
d. $937,500 - ANS-10.14 (b) $375,000.
Value = Income / Cap fee. Thus, V= $30,000 / .08 = $375,000.
10.15 The roof of a assets price $sixteen,000. The financial existence of the roof is twenty
years. Assuming the directly-line approach of depreciation, what is the depreciated price of the
roof after 3 years?
A. $sixteen,000
b. $thirteen,600
,c. $18,four hundred
d. $12,000 - ANS-10.15 (b) $thirteen,six hundred.
First derive the once a year depreciation that's the fee divided with the aid of the financial
existence. Then multiply annual depreciation instances the number of years to perceive general
depreciation. Remember to subtract depreciation from the original value if the query asks for the
finishing price. Thus, ($sixteen,000 / twenty years x 3 years) = $2,four hundred general
depreciation. The finishing price is $16,000 -2,400, or $thirteen,six hundred.
10.16 Lee needed to document his home workplace depreciation for the tax 12 months. He has
a 2,500 SF domestic and a 500 SF workplace region. Lee paid $280,000 for his home, and he
figures the land element carries about 25% of that price. If Lee depreciates on a 39-yr
foundation, how plenty can he write off for his home office depreciation in line with yr?
A. $1,077
b. $1,436
c. $five,384
d. $2,108 - ANS-10.Sixteen (a) $1,077
First, Lee's depreciable basis, without the land, is $280,000 x 75%, or $210,000. The annual
depreciation for the complete domestic is ($210, years), or $five,384.Sixty one. Second,
his office is 20% of the house (500 sf / 2,500 sf). Therefore Lee can take annual depreciation of
($five,384.61 x 20%), or $1,076.Ninety two.
10.17 A belongings is being appraised by using the fee approach. The appraiser estimates that
the land is worth $80,000 and the replacement fee of the upgrades is $350,000. Total
depreciation from all reasons is $54,000. What is the indicated value of the assets?
A. $296,000
b. $456,000
c. $324,000
d. $376,000 - ANS-10.17 (d) $376,000.
Cost Approach components: Land + (Cost of Improvements + Capital Additions - Depreciation)
= Value. Thus you have $80,000 + ($350,000 - fifty four,000), or $376,000.
10.18 An rental owner paid $500,000 for her complex five years in the past. An appraiser at that
point valued the land @ $a hundred,000, but land has liked 25% over this period. The investor
has used a 40- 12 months directly-line depreciation approach to depreciate the belongings.
What is its present day price the usage of the fee technique?
A. $437,500
b. $462,500
c. $475,000
, d. $546,875 - ANS-10.18 (c) $475,000
Use the identical Cost Approach components: Land + (Cost of Improvements + Capital
Additions - Depreciation) = Value. The land is well worth (100,000 x one hundred twenty five%),
or $125,000. Remember, you can not depreciate the land, only the value of the enhancements.
Therefore, annual depreciation is ($400,000 / forty), or $10,000. Total depreciation is ($10,000 x
five years), or $50,000. Thus the cost is ($one hundred twenty five,000 + 400,000 - 50,000), or
$475,000.
10.19 An condominium building that currently bought for $four hundred,000 had monthly gross
rent receipts of $three,2 hundred. What is its month-to-month gross rent multiplier?
A. Eighty
b. .01
c. A hundred and ten
d. A hundred twenty five - ANS-10.19 (d) one hundred twenty five.
Use the components: GRM = Price / Monthly Rent. Thus, $four hundred,000 / $three,two
hundred = one hundred twenty five.
10.2 Lots in the South Hyde subdivision are selling for approximately $.50 / SF. The
Grandersons need to build a 2,500 SF home on a 1.5 acre corner lot. The custom builder can
construct the home for $a hundred thirty five / SF. What will the finished assets cost the
Grandersons?
A. $359,a hundred and seventy
b. $370,one hundred seventy
c. $32,670
d. $374,070 - ANS-10.2 (b) $370,170
The land charges $.50 x forty three,560 SF/ac. X 1.5 ac, or $32,670. The home will value $one
hundred thirty five / SF x 2,500, or $337,500. The general assets will cost $370,one hundred
seventy.
10.20 A rental home has monthly gross earnings of $three,three hundred. A suitable gross
income multiplier derived from marketplace statistics is 14.7. What expected sale charge (to the
closest $1,000) is indicated?
A. $297,000
b. $486,000
c. $582,000
d. $519,000 - ANS-10.20 (c) $582,000.
