Real Estate Calculations Progress Exam 4

A homeowner paid 4 points for a bank loan. The bank sold the loan to an insurance company at 5-1/2 point discount and received a check for $15,000. The original amount of the loan was:

• $15,054

• $15,648.72.

• $15,563.63.

•  $15,873.02.

• 100% - 5.5% = 94.5%. $15,000 divided by 94.5% =

Assume Mr. Willis owns his home but he borrowed money to buy it with a loan payable at $112.44 per month. The balance on the loan for the last month was $16,000. $32.44 was applied on his principle on his last payment. What was the interest rate on the note in these circumstances?

• 16.6%

•  6%.

• 5-1/4%

• 9.2%

• $112.44 (monthly payment) - $32.44 (principal part of payment) = $80.00 (interest). $80.00 x 12 months = $960 interest per 1 year. $960 divided by $16,000 (loan balance) =

An income property has a value of $400,000 and returns a net of 8% to its owner. What would the value of this property be to a new purchaser who wished to receive an 10% return on his money?

• $200,000

• $266,667

• $320,000

• $160,000

• The net income is determined by recognizing that the property nets its present owner 8% of $400,000 which is $32,000 (400,000 x 8% = $32,000). Now knowing the net income is $32,000 and the investor wants and 10% return on a property with a $32,000 net, you divide the $32,000 (net income) by 10%

Several years ago, Mr. Matthews bought property for $12,000, paying $2,000 in cash with the seller taking back a trust deed for the balance of the purchase price. Before any payments had been made on the trust deed note, he sold the property several months later for $24,000. His invested dollar in these circumstances is worth:

• $7.00.

• $11.00.

• $10.10.

• $1.10.

• $12,000 (purchase price) - $2,000 (cash paid) = $10,000 (trust deed). $24,000 (sales price) - $10,000 (trust deed) = $14,000 (cash from sale). $14,000 divided by $2,000 =

Inventory in a store costs $8,500 net. It was sold for 25% profit. However, 15% of the gross profit was lost due to bad credit risks over a period of one year. How much profit did the store owner make that year?

• $1,955

• $920

• $345

• None of the above

• $8,500 x .25 = $2,125 x .15 = $318.75. $2,125 - $318.75 =

Inventory in a store costs $8,500 net. It was sold for 20% profit. However, 10% of the gross profit was lost due to bad credit risks over a period of one year. How much profit did the store owner make that year?

• $1,955

•  $1,530

• $345

• none of the above

• $8,500 x .20 = $1,700 x .10 = $170. $1,700 - $170 =

John has a loan for $18,000 with interest to be paid at the rate of $225 quarterly. What is the interest rate on the loan?

• 3% but less than 4%

• 3% but less than 4%

•    5% but less than 6%

• 6% but less than 7%

• 225 x 4 = 900 divided by 18,000 =

The entire stock of a retail store was sold for $9,400 to Bill Smith. Mr. Smith then sold the stock for 20% more than he paid for it, but due to some debts he lost 10% of the selling price. The net profit on Mr. Smith's' investment was:

• $752

• $2,100

• $8,925

• 15%.

• $9,400 x 20% = $1,880 (profit). $9,400 + $1,880 = $11,280 x 10% (loss) = $1,128 loss. $11,280 - $1,128 = $10,152 (sales price less 10% loss). $10,152 - $9,400 (purchase price) =

John buys a piece of property as an investment for $15,000. John's capital investment is $5,000. He pays 5% interest on a loan of $10,000, and the property appreciates 8%. After one year the property is sold. What percent of profit did he realize on his initial invested capital?

• 12%

• 10%

•  14%

• None of the above

• $15,000 x 8% = $1,200. $10,000 x 5% = $500. $1,200 - $500 = $700 (profit). $700 divided by $5,000 (investment) =

Jim purchased a property for 20% less than the listed price. Later he sold the property for the original listed price. What percentage profit did he make?

•  25%

• 20%

• 35%

• 45%

• If a property were listed at $150,000 and it was purchased at 20% discount, the purchase price was $120,000. The property is then sold for the list price, $150,000. $150,000 (selling price) - $120,000 (purchase price) = $30,000 (profit) divided by $120,000 =