Real Estate Calculations Progress Exam 5

A man has an investment in a 30-unit rental property which was adjacent to a freeway. Because of its proximity to the freeway, the owner lost $250 per month in rent. If the capitalization rate were set at 15%, the loss in value to the property was:

• $2,400

• $2,000

•   $20,000

• $24,000

• $250 x 12 = $3,000 divided by .15 =

Jay is the beneficiary on a trust deed. The annual interest rate is 8%. If in 5 years he has received $4,500 in interest, what is the principal amount of the loan?

• $5,460

• $11,050

•  $11,250

• $65,000

• $4,500 divided by 5 years = $900 interest per year. $900 divided by 8% =

Ned just sold his house for 9% less than he paid for it. The selling price was $105,900. What was the original purchase price?

• $111,500

•  $116,374

• $112,500

• $110,000

A $5,000 investment at 10% interest compounded annually earns how much in three years?

• $1,200

• $1,655

• $1,400

•  $1,525

• $5,000 x 10% = $500 (interest for 1st year). $5,000 + $500 = $5,500 x 10% = $550 (interest for the 2nd year). $5,500 + $550 = $6,050 x 10% = $605 (interest for the 3rd year). $500 + $550 + $605 =

If an income property is valued at $250,000 using a 6% capitalization rate, how much would an investor pay for the property if he demanded a 10% capitalization rate?

• $225,000

•  $150,000

• $300,000

• $500,000

Jerry spends 25% of her gross monthly income on her apartment rent of $600. What is her gross monthly income?

• $1,500

•   $2,400

• $2,000

• $2,420

Ben sold two parcels of land for $9,775 which was 15% higher than their cost four years ago. While Ben owned the parcels, he paid taxes each year at a rate of $7.00 per $100 on an assessed value of 30% of the purchase price. Assuming an annual loss of 4% imputed interest on Ben's original investment as an expense, how much did Ben lose on the transaction?

• $650

• $885

•   $799

• None of the above

What percentage profit would an investor make if he purchased two lots for $16,000 each and then divided into three lots and sold them for $14,000 each?

• 31%

• 21%

• 15%

• 25%

Tom obtains an interest-only purchase money loan for $60,000. The interest rate is 9.5% and the term is 30 years. How much interest will Tom have paid at the end of the 30-year term?

•   $171,000

• $17,000

• $1,700

•  $1,710,000

• $60,000 x 9.5% = $5,700 interest per year. $5,700 x 30 years =

Ted borrowed $40,000 from a bank to purchase a lot. He paid 4 points to get the loan. The loan contained a 4% prepayment penalty. His monthly payment was $160.00, including interest at 8% per year. Five years later, John sold this real estate and paid-off the loan. If the loan had an average loan balance of $38,500 during the five years Ted owned the property, what was the bank's gross profit on this loan?

• $18,600

• $7,248

• $8,600

•   $9,999

• $40,000 x 4% = $1,600 points. $40,000 x 4% = $1,600 prepayment penalty. $38,500 x 8% = $3,080 interest per year. $3,080 x 5 years = $15,400. $1,600 + $1,600 + $15,400 =