Practice math problems for the Florida Real Estate Sales Associate Exam

1. Math
Problems
63 Hour Real Estate
Pre-Licensing Class

2. Variable Leases
• Found in Unit 9
• Sometimes Referred to as a
Variable Index Lease
• Formula is
𝑁𝑒𝑤 𝐼𝑛𝑑𝑒𝑥
𝑂𝑙𝑑 𝐼𝑛𝑑𝑒𝑥
𝑥 𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑅𝑒𝑛𝑡𝑎𝑙 𝑅𝑎𝑡𝑒 = 𝑁𝑒𝑤 𝑅𝑒𝑛𝑡𝑎𝑙 𝑅𝑎𝑡𝑒

3. Variable Lease Word Problem
• A building rents for $25 a square foot with an index of 1.2. The
index increases to 1.5. What is the new (adjusted) rental rate?
Step 1: Divide the new index by the old index
1.5
1.2
= 1.25

4. Variable Lease Word Problem
• A building rents for $25 a square foot with an index of 1.2. The
index increases to 1.4. What is the new (adjusted) rental rate?
Step 2: Multiply the yielded index by the original rental rate
1.25 × $25 = $31.25

5. Net Operating Income
(NOI)
• Found in Unit 16: Real Estate
Appraisal
• Definition: Income remaining after
subtracting all relevant operating
expenses from the Effective Gross
Income (EFG)
• Formula is
𝐸𝑓𝑓𝑒𝑐𝑡𝑖𝑣𝑒 𝐺𝑟𝑜𝑠𝑠 𝐼𝑛𝑐𝑜𝑚𝑒
− 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝐸𝑥𝑝𝑒𝑛𝑠𝑒𝑠
= 𝑁𝑒𝑡 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝐼𝑛𝑐𝑜𝑚𝑒

6. Net Operating Income Word Problem
• In the analysis of an investment property, the effective gross income
(EFG) is forecast to be $496,000. The operating expenses for this
property, including a $5,200 reserve for replacements, is $226,000.
What is the property’s net operating income?
Step 1: Subtract operating expenses from the effective gross income
$496,000 - $226,000 = $270,000
Hint: the information “including a $5200 reserve for replacements is
distractor information. Ignore it.

7. Age-Life Method:
Depreciation
• Found in Unit 16: Real Estate
Appraisal
• Definition: Age-Life method is based
on a ratio of the property’s effective
age to its economic life
• Formula for Accrued Depreciation is
𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑃𝑟𝑜𝑝𝑒𝑟𝑡𝑦
𝑌𝑒𝑎𝑟𝑠 𝑜𝑓 𝐸𝑐𝑜𝑛𝑜𝑚𝑖𝑐 𝐿𝑖𝑓𝑒
× # 𝑜𝑓 𝑦𝑒𝑎𝑟𝑠 𝑜𝑓 𝐸𝑓𝑓𝑒𝑐𝑡𝑖𝑣𝑒 𝐴𝑔𝑒 = 𝐴𝑐𝑐𝑟𝑢𝑒𝑑 𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛

8. Age-Life Depreciation Word Problem
• A building is valued at $245,000 with an estimated 25-year useful
economic life. The building has an effective age of eight years. Using
the age-life method, find the depreciated value of the building.
Step 1: Divide Value of Property by Total Economic Life
$245,000 ÷ 25 𝑦𝑒𝑎𝑟𝑠 = $9,800 𝑝𝑒𝑟 𝑦𝑒𝑎𝑟

9. Age-Life Depreciation Word Problem
• A building is valued at $245,000 with an estimated 25-year useful
economic life. The building has an effective age of eight years. Using
the age-life method, find the depreciated value of the building.
Step 2: Multiply the Annual Depreciation Amount by the Effective Age of the property
$9,800 𝑥 8 𝑦𝑒𝑎𝑟𝑠 = $78,400 𝐴𝑐𝑐𝑟𝑢𝑒𝑑 𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛

10. Age-Life Depreciation Word Problem
• A building is valued at $245,000 with an estimated 25-year useful
economic life. The building has an effective age of eight years. Using
the age-life method, find the depreciated value of the building.
Step 3: Subtract Accrued Depreciation from Value of Property
$245,000 − $78,400 = $167,000 Depreciated Value of Building

11. Calculating Property
Taxes w/Cumulative Tax
Exemptions
• Found in Unit 18: Taxes Affecting
Real Estate
• To Calculate property tax
1. Determine the taxable value of the
property
2. Multiply the taxable value by the tax
rate
3. Multiple exemptions may result in
multiple taxable values by which
various tax rates are applied

12. Calculating Property Taxes w/Cumulative
Tax Exemptions
Base Homestead Exemption by Value of Property
Assessed Value Applicable Homestead Exemption
$25,000 - $75,000 $25,000 base exemption from city, county and
school board taxes
Above $75,000 $25,000 base exemption + an additional $25,000
from city and county taxes only

13. Calculating Property Taxes w/Cumulative
Tax Exemptions
Additional Homestead Exemptions by Individual Qualifying Circumstance
Qualifying Individual Applicable Homestead Exemption
Surviving Spouse who has not remarried $500
Blind Person $500
Totally and Permanently Disabled non-veteran $500
Totally and Permanently Disabled quadriplegic 100% exempt
Totally and Permanently Disabled first responder 100% exempt

14. Calculating Property Taxes w/Cumulative
Tax Exemptions
• Formulas for Calculating property taxes with cumulative
exemptions are
𝐴𝑠𝑠𝑒𝑠𝑠𝑒𝑑 𝑉𝑎𝑙𝑢𝑒 − 𝐻𝑜𝑚𝑒𝑠𝑡𝑒𝑎𝑑 𝐸𝑥𝑒𝑚𝑝𝑡𝑖𝑜𝑛𝑠 = 𝑇𝑎𝑥𝑎𝑏𝑙𝑒 𝑉𝑎𝑙𝑢𝑒
𝑇𝑎𝑥𝑎𝑏𝑙𝑒 𝑣𝑎𝑙𝑢𝑒 × 𝑇𝑎𝑥 𝑅𝑎𝑡𝑒 = 𝐴𝑛𝑛𝑢𝑎𝑙 𝑃𝑟𝑜𝑝𝑒𝑟𝑡𝑦 𝑇𝑎𝑥 𝐷𝑢𝑒

15. Calculating Property Taxes w/Cumulative
Tax Exemptions Word Problem
• A homesteaded property is located in Tampa, Florida, in Hillsborough
County. The city tax rate is 8.1 mills, the county tax rate is 9.3 mills,
and the school district tax rate is 6 mills. The homeowner is blind and
has qualified for homestead exemption. The home has been
assessed at $235,000. What must the homeowner pay in property
taxes?
Step 1: Determine Base and Additional Homestead Exemptions
• Base Homestead = $25,000
• Additional Homestead by property value = $25,000
• Additional Homestead by Individual circumstance = $500

16. Calculating Property Taxes w/Cumulative
Tax Exemptions Word Problem
• A homesteaded property is located in Tampa, Florida, in Hillsborough
County. The city tax rate is 8.1 mills, the county tax rate is 9.3 mills,
and the school district tax rate is 6 mills. The homeowner is blind and
has qualified for homestead exemption. The home has been
assessed at $235,000. What must the homeowner pay in property
taxes?
Step 2: Subtract the Homestead Exemptions from Property value to find assessed
value
$235,000 - $50,500 = $184,500 Taxable value for city and county taxes
$235,000 - $25,000 = $210,000 Taxable value for school taxes

17. Calculating Property Taxes w/Cumulative
Tax Exemptions Word Problem
• A homesteaded property is located in Tampa, Florida, in Hillsborough
County. The city tax rate is 8.1 mills, the county tax rate is 9.3 mills,
and the school district tax rate is 6 mills. The homeowner is blind and
has qualified for homestead exemption. The home has been
assessed at $235,000. What must the homeowner pay in property
taxes?
Step 3: Multiply the Taxable Values by the Millage Rates
$184,500 x 8.1 mills = city tax rate
$184,500 x 9.3 mills = county tax rate
$210,000 x 6 mills = school district tax rate

18. Calculating Property Taxes w/Cumulative
Tax Exemptions Word Problem
• A homesteaded property is located in Tampa, Florida, in Hillsborough
County. The city tax rate is 8.1 mills, the county tax rate is 9.3 mills,
and the school district tax rate is 6 mills. The homeowner is blind and
has qualified for homestead exemption. The home has been
assessed at $235,000. What must the homeowner pay in property
taxes?
Step 3: Multiply the Taxable Values by the Millage Rates
$184,500 x .0081 = $1494.45 city tax rate
$184,500 x .0093 = $1715.85 county tax rate
$210,500 x .006 = $1263.00 school district tax rate

19. Calculating Property Taxes w/Cumulative
Tax Exemptions Word Problem
• A homesteaded property is located in Tampa, Florida, in Hillsborough
County. The city tax rate is 8.1 mills, the county tax rate is 9.3 mills,
and the school district tax rate is 6 mills. The homeowner is blind and
has qualified for homestead exemption. The home has been
assessed at $235,000. What must the homeowner pay in property
taxes?
Step 4: Add all Taxes to determine Homeowner Taxes for year
$184,500 x .0081 = $1494.45 city tax rate
$184,500 x .0093 = $1715.85 county tax rate
$210,500 x .006 = $1263.00 school district tax rate
$4473.30

20. Calculating Special
Assessments
• Found in Unit 18: Taxes Affecting
Real Estate
• To Calculate Special Assessment for
Street Paving
1. Multiply the front footage of the
property by the price per linear foot
2. Multiply the homeowner’s cost of
paving by the percentage homeowner
has to share with the government
3. Divide homeowner’s share of cost by 2
for the homeowner’s final assessment
cost because he is only paying for his
half of the street paving

21. Calculating Special Assessment for Street
Paving Word Problem
• The city is repaving the streets in a neighborhood. The city will
assume 35% of the expense. The city has approved a bid to
pave the streets at a cost of $50 per linear foot. How much is
the special assessment for a lot that measures 120' by 130'?
Step 1: Determine Cost of Linear Footage by Property’s Frontal (Street) Dimensions
120 x $50 = $6000

22. Calculating Special Assessment for Street
Paving Word Problem
• The city is repaving the streets in a neighborhood. The city will
assume 35% of the expense. The city has approved a bid to
pave the streets at a cost of $50 per linear foot. How much is
the special assessment for a lot that measures 120' by 130'?
Step 2: Multiply Total by %age for which Homeowner is responsible
120 x $50 = $6000
$6000 x .65 = $3900

23. Calculating Special Assessment for Street
Paving Word Problem
• The city is repaving the streets in a neighborhood. The city will
assume 35% of the expense. The city has approved a bid to
pave the streets at a cost of $50 per linear foot. How much is
the special assessment for a lot that measures 120' by 130'?
Step 3: Divide Homeowner’s Assessment by 2 because they are only responsible for
one side of the street
120 x $50 = $6000
$6000 x .65 = $3900
$2100 ÷ 2 =$1950

24. Calculating Proration
for Rental Income
• Found in Unit 14: Real Estate
Related Computations and Closing
Transactions
• To Calculate Rental Proration
between the Seller and Buyer
1. Find the daily rent amount by dividing
the total rent by number of days in the
month (unless otherwise stated)
2. Multiply the per day rental cost by the
number of days that will be owed to the
buyer based on the closing day

25. Calculating Rental Prorations Word
Problem
• A residential investment property is scheduled to close on
September 13. The seller collected rent for September at the first of
the month amounting to $1250. According to the contract for sale
and purchase, the buyer is due the rental income for the day of
closing. Calculate the proration.
Step 1: The number of days the Buyer will own the home based on closing date
September 13 closing = 18 days owed to buyer

26. Calculating Rental Prorations Word
Problem
• A residential investment property is scheduled to close on
September 13. The seller collected rent for September at the first of
the month amounting to $1200. According to the contract for sale
and purchase, the buyer is due the rental income for the day of
closing. Calculate the proration.
Step 2: Divide the total Rent by the Number of Days in Month
September 13 closing = 18 days owed to buyer
$1200 ÷ 30 𝐷𝑎𝑦𝑠 = $40 𝑝𝑒𝑟 𝑑𝑎𝑦

27. Calculating Rental Prorations Word
Problem
• A residential investment property is scheduled to close on
September 13. The seller collected rent for September at the first of
the month amounting to $1200. According to the contract for sale
and purchase, the buyer is due the rental income for the day of
closing. Calculate the proration.
Step 3: Multiply the per Day $ amount by the number of days the buyer will own
property in the month
September 13 closing = 18 days owed to buyer
$1200 ÷ 30 𝐷𝑎𝑦𝑠 = $40 𝑝𝑒𝑟 𝑑𝑎𝑦
$40 x 18 = $720

28. Calculating Rental Prorations Word
Problem
• A residential investment property is scheduled to close on
September 13. The seller collected rent for September at the first of
the month amounting to $1200. According to the contract for sale
and purchase, the buyer is due the rental income for the day of
closing. Calculate the proration.
Step 4: Determine who is debited and who is credited
September 13 closing = 18 days owed to buyer
$1200 ÷ 30 𝐷𝑎𝑦𝑠 = $40 𝑝𝑒𝑟 𝑑𝑎𝑦
$40 x 18 = $720
Because rent is paid in advance, the seller will be debited and the buyer will be credited
Debit seller $720; Credit buyer $720

29. Calculating
Documentary Taxes
• Found in Unit 14: Real Estate
Related Computations and Closing
Transactions
• Documentary stamp taxes on the
deed is for the full purchase price
• Documentary stamp taxes on
financing include
1. Doc stamps on the promissory note is
based on the amount of the mortgage
2. Intangible tax is on the mortgage loan

30. Calculating Documentary Taxes
State Transfer Taxes are Documentary Taxes on the Deed, the Promissory Note and the
New Mortgage
Type of Tax Rate Charged On Applies to
Doc Stamps on Deed $.70 per $100
$.60 per $100 in
Miami/Dade County
Purchased Price All Conveyances
Doc Stamps on Note $.35 per $100 Promissory Note New and Assumed
Mortgage Loans
Intangible Tax $.002 Mortgage Loan New Financing

31. Calculating Documentary Stamp Taxes
• Calculate all applicable documentary stamp taxes and intangible taxes for property
located in Leon County:
• Purchase price $285,900
• Earnest money deposit $15,900
• Recorded first mortgage (assumed) $157,310
• Second mortgage (new) $100,000
• Cash at closing $12,690
Step 1: Determine the Doc Stamps on the Deed
$285,900÷ $100 = $2859
$2859 x .70 = $2001.30

32. Calculating Documentary Stamp Taxes
• Calculate all applicable documentary stamp taxes and intangible taxes for property
located in Leon County:
• Purchase price $285,900
• Earnest money deposit $15,900
• Recorded first mortgage (assumed) $157,310
• Second mortgage (new) $100,000
• Cash at closing $12,690
Step 2: Determine the Doc Stamps on the Financing
Doc Stamp Tax on the Notes
Assumed: $157,310 ÷ $100 = $1573.10 𝑟𝑜𝑢𝑛𝑑𝑒𝑑 𝑢𝑝 𝑡𝑜 1574 𝑡𝑎𝑥𝑎𝑏𝑙𝑒 𝑢𝑛𝑖𝑡𝑠
$1574 𝑥 .35 = $550.90
New: $100,000 ÷ $100 = $1000 𝑥 .35 = $350

33. Calculating Documentary Stamp Taxes
• Calculate all applicable documentary stamp taxes and intangible taxes for property
located in Leon County:
• Purchase price $285,900
• Earnest money deposit $15,900
• Recorded first mortgage (assumed) $157,310
• Second mortgage (new) $100,000
• Cash at closing $12,690
Step 3: Determine the Intangible Tax on Financing
Intangible Tax on the New Mortgage
New: $100,000 x $.002 = $200

34. Calculating Documentary Stamp Taxes
• Calculate all applicable documentary stamp taxes and intangible taxes for property
located in Leon County:
• Purchase price $285,900
• Earnest money deposit $15,900
• Recorded first mortgage (assumed) $157,310
• Second mortgage (new) $100,000
• Cash at closing $12,690
Step 4: Sum all Tax amounts
2001.30 + 550.90 + 350 + 200 = $3102.20

35. Calculating Interest on
an Assumed Loan
• Found in Unit 14: Real Estate
Related Computations and
Closing Transactions
• Interest on an assumed loan must
be prorated for the month of
closing
• The seller is debited and the buyer
is credited on interest for an
assumed loan

36. Calculating Mortgage Interest on an
Assumed Loan for the month of Closing
• Closing date is February 12. The buyer is assuming the seller's
mortgage loan that has a principal balance of $212,500 at 3.5%
interest. The day of closing is charged to the buyer. What is the
proration and how is it entered on the closing disclosure?
Step 1: Determine the Daily Interest
𝐿𝑜𝑎𝑛 𝑎𝑚𝑜𝑢𝑛𝑡 𝑥 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑅𝑎𝑡𝑒 = 𝐴𝑛𝑛𝑢𝑎𝑙 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡
𝐴𝑛𝑛𝑢𝑎𝑙 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 ÷ 365 𝑑𝑎𝑦𝑠 = 𝑃𝑒𝑟 𝐷𝑎𝑦 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡
$212,500 × .035 = 7437.50
$7437.50 ÷ 365 = $20.37671232876712

37. Calculating Mortgage Interest on an
Assumed Loan for the month of Closing
• Closing date is February 12. The buyer is assuming the seller's
mortgage loan that has a principal balance of $212,500 at 3.5%
interest. The day of closing is charged to the buyer. What is the
proration and how is it entered on the closing disclosure?
Step 2: Multiply the Per Diem Interest by the number of Seller Days
𝐿𝑜𝑎𝑛 𝑎𝑚𝑜𝑢𝑛𝑡 𝑥 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑅𝑎𝑡𝑒 = 𝐴𝑛𝑛𝑢𝑎𝑙 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡
𝐴𝑛𝑛𝑢𝑎𝑙 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 ÷ 365 𝑑𝑎𝑦𝑠 = 𝑃𝑒𝑟 𝐷𝑎𝑦 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡
$212,500 × .035 = 7437.50
$7437.50 ÷ 365 = $20.37671232876712
20.37671232876712 × 11 = $224.14

38. Calculating Mortgage Interest on an
Assumed Loan for the month of Closing
• Closing date is February 12. The buyer is assuming the seller's
mortgage loan that has a principal balance of $212,500 at 3.5%
interest. The day of closing is charged to the buyer. What is the
proration and how is it entered on the closing disclosure?
Step 2: Multiply the Per Diem Interest by the number of Seller Days
𝐿𝑜𝑎𝑛 𝑎𝑚𝑜𝑢𝑛𝑡 𝑥 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑅𝑎𝑡𝑒 = 𝐴𝑛𝑛𝑢𝑎𝑙 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡
𝐴𝑛𝑛𝑢𝑎𝑙 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 ÷ 365 𝑑𝑎𝑦𝑠 = 𝑃𝑒𝑟 𝐷𝑎𝑦 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡
$212,500 × .035 = 7437.50
$7437.50 ÷ 365 = $20.37671232876712
20.37671232876712 × 11 = $224.14
Debit seller $224.14; Credit buyer $224.14