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Questions and Answers
A property is sold for $250,000, and the real estate broker's commission rate is 6%. What is the commission earned by the broker?
A property is sold for $250,000, and the real estate broker's commission rate is 6%. What is the commission earned by the broker?
- $15,000
- $1,500 (correct)
- $150,000
- $235,000
A borrower obtains a mortgage loan with a principal balance of $150,000 and an annual interest rate of 4.5%. What is the amount owed on the loan after one year, disregarding any principal payments?
A borrower obtains a mortgage loan with a principal balance of $150,000 and an annual interest rate of 4.5%. What is the amount owed on the loan after one year, disregarding any principal payments?
- $675
- $143,250 (correct)
- $156,750
- $6,750
A property is purchased for $300,000 and appreciates at a rate of 3% per year. What is the approximate future value of the property after 5 years?
A property is purchased for $300,000 and appreciates at a rate of 3% per year. What is the approximate future value of the property after 5 years?
- $309,000 (correct)
- $315,000
- $347,782
- $350,000
A property is valued at $200,000 and depreciates at a rate of 2% per year. What is the approximate future value of the property after 3 years?
A property is valued at $200,000 and depreciates at a rate of 2% per year. What is the approximate future value of the property after 3 years?
A buyer obtains a loan of $250,000 and pays 2 points at closing. How much does the buyer pay in points?
A buyer obtains a loan of $250,000 and pays 2 points at closing. How much does the buyer pay in points?
A rectangular lot measures 150 feet in length and 100 feet in width. What is the area of the lot?
A rectangular lot measures 150 feet in length and 100 feet in width. What is the area of the lot?
A square lot has sides that are each 209 feet long. How close is the area of the lot to 1 acre?
A square lot has sides that are each 209 feet long. How close is the area of the lot to 1 acre?
A triangular-shaped lot has a base of 80 feet and a height of 60 feet. What is the approximate area of this lot?
A triangular-shaped lot has a base of 80 feet and a height of 60 feet. What is the approximate area of this lot?
A property has an assessed value of $350,000 and the tax rate is 1.2% of the assessed value. What are the annual taxes for this property?
A property has an assessed value of $350,000 and the tax rate is 1.2% of the assessed value. What are the annual taxes for this property?
What is the area of a lot that measures 2 hectares?
What is the area of a lot that measures 2 hectares?
Flashcards
Commission
Commission
A sum due to a real estate broker for their services.
Point (in finance)
Point (in finance)
Equal to one percent of a loan amount.
Commission Earned Formula
Commission Earned Formula
Final Sales Price multiplied by the Commission Rate.
Amount Owed on a Loan Formula
Amount Owed on a Loan Formula
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Appreciation Formula
Appreciation Formula
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Depreciation Formula
Depreciation Formula
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Acre
Acre
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Gross Income
Gross Income
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Net Income
Net Income
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Principal
Principal
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Study Notes
- A commission is the sum due to a real estate broker for services rendered.
- A point is equal to 1% of a loan amount; for instance, 1 point on a $100,000 loan equals $1,000.
Percentages
- Percentages are used in calculating commissions, interest, appreciation, and depreciation.
Calculating Commissions
- Commission earned = final sales price × commission rate.
Calculating Interest
- The interest rate is the cost of borrowing money.
- Amount owed on loan = principal balance × annual interest rate.
Calculating Appreciation
- Property value = property value × % increase each year (expressed as 1 + decimal equivalent of the percentage).
- FV = PV × (1 + a)^n, where FV = future value, PV = present value, a = appreciation rate, and n = number of years.
Calculating Depreciation
- Property value = property value × % decrease each year (expressed as 1 - decimal equivalent of the percentage).
- FV = PV × (1 - d)^n, where FV = future value, PV = present value, d = depreciation rate, and n = number of years.
Points
- 1 point is equivalent to 1% of the loan amount.
Measurements
- Acre: A unit of land measurement equaling 43,560 square feet.
- Front Foot: The length of a parcel that faces a street.
- Hectare: A metric unit equal to 10,000 square meters.
Income
- Gross Income: The total income from a property before any expenses are deducted.
- Net Income: The income remaining after subtracting expenses from the gross income.
Principal and Interest
- Principal: The amount of money lent or invested on which interest is paid.
- Interest: A fee paid by a borrower for the use of money.
Useful Formulas & Numbers
Closing Cost Calculation
- Closing Costs = Loan Amount × points %
Area of an Irregular Lot
- Step 1: Break the shape down into squares, rectangles, and triangles.
- Step 2: Calculate the area of each shape.
- Step 3: Sum the areas of each shape to find the total area.
Perimeter of a Lot or Shape
- Add up the lengths of all sides.
Annual Taxes Calculation
- Annual Taxes = Assessed Value × Tax Rate
Calculating Area of Lot
- Area of Lot = Length x Width
Key Conversions
- 1 acre = 43,560 square feet
- 1 square mile = 640 acres
- 1 hectare = 10,000 square meters = 2.47 acres
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Description
Learn about calculating real estate commissions based on sales price and commission rate. Understand interest calculations, appreciation, and depreciation using percentage changes in property value over time. Formulas for future value are included.
