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The Real Estate School
P E N N S Y LVAN I A R E AL E S TAT E E X AM
REAL ESTATE MATH CONCEPTS II
1
PRORATIONS (PAGE 3)
2
3. Mary has received permission from John’s mortgage lender to
assume the outstanding balance on his mortgage of $124,752.
Mortgage payments are due on the first of the month. The
house is sold on July 20th. If the interest rate is 4¾%, how much
will John need to credit Mary for accrued interest?
Get rid of the words: Mort. Balance = $124,752
Interest Rate = 4¾%
Sold Date = July 20th
Accrued Interest = ?
*** Rent Payment vs. Mortgage Payment ***
PRORATIONS (PAGE 3)
3
3. Mary has received permission from John’s mortgage lender to
assume the outstanding balance on his mortgage of $124,752.
Mortgage payments are due on the first of the month. The
house is sold on July 20th. If the interest rate is 4¾%, how much
will John need to credit Mary for accrued interest?
$124,752 x .0475 = $5,925.72 interest for the year
$5,925.72 ÷ 360 days = $16.46 interest per day
PRORATIONS (PAGE 3)
4
3. Mary has received permission from John’s mortgage lender to
assume the outstanding balance on his mortgage of $124,752.
Mortgage payments are due on the first of the month. The
house is sold on July 20th. If the interest rate is 4¾%, how much
will John need to credit Mary for accrued interest?
July 1
John’s Last Pymt
August 1
Mary’s 1st Pymt
July 20
20 days 10 days
Period of time that John needs
to credit Mary
$16.46 x 20 days = $329.20
Settlement
PRORATIONS (PAGE 3)
5
5. Real estate property taxes of $5,000 were paid for the calendar
year on the first day of the year. What amount will be credited
to the seller if closing is April 15th?
Get rid of the words: Real Estate Taxes = $5,000/year
Paid Date = January 1st
Sold Date = April 15th
Seller Credit = ?
PRORATIONS (PAGE 3)
6
5. Real estate property taxes of $5,000 were paid for the calendar
year on the first day of the year. What amount will be credited
to the seller if closing is April 15th?
1/1 1/1
7/1 8/1
6/1
5/1
4/1
3/1
2/1 9/1 10/1 11/1 12/1
4/15
Settlement Date
1/1
Taxes Paid
1/1
End of Tax Period
Buyer owes Seller 8½ months of taxes
$5,000 ÷ 12 months = $416.67/month
$416.67 x 8.5 = $3,541.70
PROFIT & LOSS (PAGE 5)
7
3. Jim wants to sell his house in the future at a 14% profit. He is
purchasing the house for $137,000. What would the sales price
have to be if Jim is paying his real estate broker a 6.5%
commission?
Get rid of the words: Profit = 14%
Purchase Price = $137,000
Commission = 6.5%
Sales Price = ?
PROFIT & LOSS (PAGE 5)
8
3. Jim wants to sell his house in the future at a 14% profit. He is
purchasing the house for $137,000. What would the sales price
have to be if Jim is paying his real estate broker a 6.5%
commission?
$137,000 100%
=
? 114%
x
÷
$137,000 x 1.14 = $156,180
$156,180 ÷ 1.00 = $156,180
Commission wasn’t paid yet
PROFIT & LOSS (PAGE 5)
9
3. Jim wants to sell his house in the future at a 14% profit. He is
purchasing the house for $137,000. What would the sales price
have to be if Jim is paying his real estate broker a 6.5%
commission?
$156,180 93.5%
=
? 100%
x
÷
$156,180 x 1.00 = $156,180
$156,180 ÷ .935 = $167,037
PROFIT & LOSS (PAGE 5)
10
11. Jamie bought a piece of land for $11,900 per acre. If she wants
to sell the ground, a real estate brokerage commission of 7%
would be charged. If she wants to make a 20% profit, what
would she have to sell her 5 acre tract of land for?
Get rid of the words: Cost = $11,900 x 5 acres = $59,500
Commission = 7%
Profit = 20%
Sales Price = ?
PROFIT & LOSS (PAGE 5)
11
11. Jamie bought a piece of land for $11,900 per acre. If she wants
to sell the ground, a real estate brokerage commission of 7%
would be charged. If she wants to make a 20% profit, what
would she have to sell her 5 acre tract of land for?
$59,500 100%
=
? 120%
x
÷
$59,500 x 1.20 = $71,400
$71,400 ÷ 1.00 = $71,400
Commission wasn’t paid yet
PROFIT & LOSS (PAGE 5)
12
11. Jamie bought a piece of land for $11,900 per acre. If she wants
to sell the ground, a real estate brokerage commission of 7%
would be charged. If she wants to make a 20% profit, what
would she have to sell her 5 acre tract of land for?
$71,400 93.0%
=
? 100%
x
÷
$71,400 x 1.00 = $71,400
$71,400 ÷ .93 = $76,774
PRINCIPAL & INTEREST (PAGE 8)
13
1. Carl has borrowed $2,000 at 6.5% interest. The loan will be
repaid in 9 months What amount will be repaid?
Get rid of the words: Principal = $2,000
Interest Rate = 6.5%
Term = 9 months
Paid = ?
PRINCIPAL & INTEREST (PAGE 8)
14
1. Carl has borrowed $2,000 at 6.5% interest. The loan will be
repaid in 9 months What amount will be repaid?
$2,000 x .065 = $130 interest per year
$130 ÷ 12 months = $10.83 per month in interest
$10.83 x 9 months = $97.47 paid in interest
$2,000 + $97.47 = $2,097.47
PRINCIPAL & INTEREST (PAGE 8)
15
6. A mortgage is given for 80% of the appraised value of a house.
If the interest on the mortgage is $5,000 semi-annually at an
annual rate of 4.5%, what is the appraised value of the house?
(Round your answer to the nearest dollar.)
Get rid of the words: Mortgage Amount = 80% x App. Value
Semi-annual Interest = $5,000
Interest Rate = 4.5%
Appraised Value = ?
PRINCIPAL & INTEREST (PAGE 8)
16
6. A mortgage is given for 80% of the appraised value of a house.
If the interest on the mortgage is $5,000 semi-annually at an
annual rate of 4.5%, what is the appraised value of the house?
(Round your answer to the nearest dollar.)
$5,000 x 2 = $10,000 interest for year
Mortgage x .045 = $10,000
Mortgage = $10,000 ÷ .045
Mortgage = $222,222.22
Appraised Value x .80 = $222,222.22
Appraised Value = $222,222.22 ÷ .80
Appraised Value = $277,778
COMMISSION & SELLING PRICE (PAGE 10)
17
2. A salesperson was the listing and selling agent in the same
transaction where she received $18,200 and was on a 70/30
commission split (70% agent - 30% company) with her company.
The commission rate charged in the transaction was 6.5%.
What was the selling price?
Get rid of the words: Agent Commission = $18,200
Agent Commission Split = 70/30
Commission Rate = 6.5%
Selling Price = ?
COMMISSION & SELLING PRICE (PAGE 10)
18
2. A salesperson was the listing and selling agent in the same
transaction where she received $18,200 and was on a 70/30
commission split (70% agent - 30% company) with her company.
The commission rate charged in the transaction was 6.5%.
What was the selling price?
Total Commission x .70 = $18,200
Total Commission = $18,200 ÷ .70
Total Commission = $26,000
Sales Price x .065 = $26,000
Sales Price = $26,000 ÷ .065
Sales Price = $400,000
COMMISSION & SELLING PRICE (PAGE 11)
19
7. Cathy sold a home for $110,000 that was listed by another
broker and received a commission check of $2,186.25. The
multiple listing service indicated that Cathy’s company would
receive 50% of the total commission. If Cathy received 53% of
the commission amount that her broker received, what was the
commission rate?
Get rid of the words:
Sale Price = $110,000
Cathy’s Commission = $2,186.25
Co-op Commission Split = 50%
Cathy’s Commission Split = 53%
Commission Rate = ?
COMMISSION & SELLING PRICE (PAGE 11)
20
7. Cathy sold a home for $110,000 that was listed by another
broker and received a commission check of $2,186.25. The
multiple listing service indicated that Cathy’s company would
receive 50% of the total commission. If Cathy received 53% of
the commission amount that her broker received, what was the
commission rate?
Co-op Commission x .53 = $2,186.25
Co-op Commission = $2,186.25 ÷ .53
Co-op Commission = $4,125
Total Commission = $4,125 x 2
Total Commission = $8,250
Commission Rate x $110,000 = $8,250
Commission Rate = $8,250 ÷ $110,000
Commission Rate = .075 or 7.5%

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LCAR Real Estate Practice - Real Estate Math Concepts II

  • 1. The Real Estate School P E N N S Y LVAN I A R E AL E S TAT E E X AM REAL ESTATE MATH CONCEPTS II 1
  • 2. PRORATIONS (PAGE 3) 2 3. Mary has received permission from John’s mortgage lender to assume the outstanding balance on his mortgage of $124,752. Mortgage payments are due on the first of the month. The house is sold on July 20th. If the interest rate is 4¾%, how much will John need to credit Mary for accrued interest? Get rid of the words: Mort. Balance = $124,752 Interest Rate = 4¾% Sold Date = July 20th Accrued Interest = ? *** Rent Payment vs. Mortgage Payment ***
  • 3. PRORATIONS (PAGE 3) 3 3. Mary has received permission from John’s mortgage lender to assume the outstanding balance on his mortgage of $124,752. Mortgage payments are due on the first of the month. The house is sold on July 20th. If the interest rate is 4¾%, how much will John need to credit Mary for accrued interest? $124,752 x .0475 = $5,925.72 interest for the year $5,925.72 ÷ 360 days = $16.46 interest per day
  • 4. PRORATIONS (PAGE 3) 4 3. Mary has received permission from John’s mortgage lender to assume the outstanding balance on his mortgage of $124,752. Mortgage payments are due on the first of the month. The house is sold on July 20th. If the interest rate is 4¾%, how much will John need to credit Mary for accrued interest? July 1 John’s Last Pymt August 1 Mary’s 1st Pymt July 20 20 days 10 days Period of time that John needs to credit Mary $16.46 x 20 days = $329.20 Settlement
  • 5. PRORATIONS (PAGE 3) 5 5. Real estate property taxes of $5,000 were paid for the calendar year on the first day of the year. What amount will be credited to the seller if closing is April 15th? Get rid of the words: Real Estate Taxes = $5,000/year Paid Date = January 1st Sold Date = April 15th Seller Credit = ?
  • 6. PRORATIONS (PAGE 3) 6 5. Real estate property taxes of $5,000 were paid for the calendar year on the first day of the year. What amount will be credited to the seller if closing is April 15th? 1/1 1/1 7/1 8/1 6/1 5/1 4/1 3/1 2/1 9/1 10/1 11/1 12/1 4/15 Settlement Date 1/1 Taxes Paid 1/1 End of Tax Period Buyer owes Seller 8½ months of taxes $5,000 ÷ 12 months = $416.67/month $416.67 x 8.5 = $3,541.70
  • 7. PROFIT & LOSS (PAGE 5) 7 3. Jim wants to sell his house in the future at a 14% profit. He is purchasing the house for $137,000. What would the sales price have to be if Jim is paying his real estate broker a 6.5% commission? Get rid of the words: Profit = 14% Purchase Price = $137,000 Commission = 6.5% Sales Price = ?
  • 8. PROFIT & LOSS (PAGE 5) 8 3. Jim wants to sell his house in the future at a 14% profit. He is purchasing the house for $137,000. What would the sales price have to be if Jim is paying his real estate broker a 6.5% commission? $137,000 100% = ? 114% x ÷ $137,000 x 1.14 = $156,180 $156,180 ÷ 1.00 = $156,180 Commission wasn’t paid yet
  • 9. PROFIT & LOSS (PAGE 5) 9 3. Jim wants to sell his house in the future at a 14% profit. He is purchasing the house for $137,000. What would the sales price have to be if Jim is paying his real estate broker a 6.5% commission? $156,180 93.5% = ? 100% x ÷ $156,180 x 1.00 = $156,180 $156,180 ÷ .935 = $167,037
  • 10. PROFIT & LOSS (PAGE 5) 10 11. Jamie bought a piece of land for $11,900 per acre. If she wants to sell the ground, a real estate brokerage commission of 7% would be charged. If she wants to make a 20% profit, what would she have to sell her 5 acre tract of land for? Get rid of the words: Cost = $11,900 x 5 acres = $59,500 Commission = 7% Profit = 20% Sales Price = ?
  • 11. PROFIT & LOSS (PAGE 5) 11 11. Jamie bought a piece of land for $11,900 per acre. If she wants to sell the ground, a real estate brokerage commission of 7% would be charged. If she wants to make a 20% profit, what would she have to sell her 5 acre tract of land for? $59,500 100% = ? 120% x ÷ $59,500 x 1.20 = $71,400 $71,400 ÷ 1.00 = $71,400 Commission wasn’t paid yet
  • 12. PROFIT & LOSS (PAGE 5) 12 11. Jamie bought a piece of land for $11,900 per acre. If she wants to sell the ground, a real estate brokerage commission of 7% would be charged. If she wants to make a 20% profit, what would she have to sell her 5 acre tract of land for? $71,400 93.0% = ? 100% x ÷ $71,400 x 1.00 = $71,400 $71,400 ÷ .93 = $76,774
  • 13. PRINCIPAL & INTEREST (PAGE 8) 13 1. Carl has borrowed $2,000 at 6.5% interest. The loan will be repaid in 9 months What amount will be repaid? Get rid of the words: Principal = $2,000 Interest Rate = 6.5% Term = 9 months Paid = ?
  • 14. PRINCIPAL & INTEREST (PAGE 8) 14 1. Carl has borrowed $2,000 at 6.5% interest. The loan will be repaid in 9 months What amount will be repaid? $2,000 x .065 = $130 interest per year $130 ÷ 12 months = $10.83 per month in interest $10.83 x 9 months = $97.47 paid in interest $2,000 + $97.47 = $2,097.47
  • 15. PRINCIPAL & INTEREST (PAGE 8) 15 6. A mortgage is given for 80% of the appraised value of a house. If the interest on the mortgage is $5,000 semi-annually at an annual rate of 4.5%, what is the appraised value of the house? (Round your answer to the nearest dollar.) Get rid of the words: Mortgage Amount = 80% x App. Value Semi-annual Interest = $5,000 Interest Rate = 4.5% Appraised Value = ?
  • 16. PRINCIPAL & INTEREST (PAGE 8) 16 6. A mortgage is given for 80% of the appraised value of a house. If the interest on the mortgage is $5,000 semi-annually at an annual rate of 4.5%, what is the appraised value of the house? (Round your answer to the nearest dollar.) $5,000 x 2 = $10,000 interest for year Mortgage x .045 = $10,000 Mortgage = $10,000 ÷ .045 Mortgage = $222,222.22 Appraised Value x .80 = $222,222.22 Appraised Value = $222,222.22 ÷ .80 Appraised Value = $277,778
  • 17. COMMISSION & SELLING PRICE (PAGE 10) 17 2. A salesperson was the listing and selling agent in the same transaction where she received $18,200 and was on a 70/30 commission split (70% agent - 30% company) with her company. The commission rate charged in the transaction was 6.5%. What was the selling price? Get rid of the words: Agent Commission = $18,200 Agent Commission Split = 70/30 Commission Rate = 6.5% Selling Price = ?
  • 18. COMMISSION & SELLING PRICE (PAGE 10) 18 2. A salesperson was the listing and selling agent in the same transaction where she received $18,200 and was on a 70/30 commission split (70% agent - 30% company) with her company. The commission rate charged in the transaction was 6.5%. What was the selling price? Total Commission x .70 = $18,200 Total Commission = $18,200 ÷ .70 Total Commission = $26,000 Sales Price x .065 = $26,000 Sales Price = $26,000 ÷ .065 Sales Price = $400,000
  • 19. COMMISSION & SELLING PRICE (PAGE 11) 19 7. Cathy sold a home for $110,000 that was listed by another broker and received a commission check of $2,186.25. The multiple listing service indicated that Cathy’s company would receive 50% of the total commission. If Cathy received 53% of the commission amount that her broker received, what was the commission rate? Get rid of the words: Sale Price = $110,000 Cathy’s Commission = $2,186.25 Co-op Commission Split = 50% Cathy’s Commission Split = 53% Commission Rate = ?
  • 20. COMMISSION & SELLING PRICE (PAGE 11) 20 7. Cathy sold a home for $110,000 that was listed by another broker and received a commission check of $2,186.25. The multiple listing service indicated that Cathy’s company would receive 50% of the total commission. If Cathy received 53% of the commission amount that her broker received, what was the commission rate? Co-op Commission x .53 = $2,186.25 Co-op Commission = $2,186.25 ÷ .53 Co-op Commission = $4,125 Total Commission = $4,125 x 2 Total Commission = $8,250 Commission Rate x $110,000 = $8,250 Commission Rate = $8,250 ÷ $110,000 Commission Rate = .075 or 7.5%