Alabama Real Estate Math
Practice Questions & Answers (2026)
Real estate math questions appear on every Alabama real estate exam and test a focused set of calculations: commission splits, prorations (property tax, rent, interest), loan-to-value ratios, appreciation and depreciation, and area calculations. The Alabama Real Estate Commission (AREC) does not provide a calculator — but the math is designed to be workable without one if you know the right formulas. Alabama candidates consistently lose points on proration questions because they apply the wrong day-count convention (360-day vs. 365-day year) or miscalculate the seller's vs. buyer's share. Work through every problem in this section until you can solve each type without hesitation.
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Alabama Real Estate Math — Practice Questions & Answers
111 questions on Real Estate Math from the Alabama real estate question bank. First 10 are free — sign up to unlock all 111.
Q1. A property in Alabama sells for $240,000. The total commission is 6%. How much does the listing broker receive if the commission is split equally with the buyer's broker?
Explanation
Total commission: $240,000 × 0.06 = $14,400. Split equally: $14,400 ÷ 2 = $7,200 for each broker.
Q2. Alabama property has an assessed value of $18,000 (at 10% of market value). The tax rate is 50 mills. What is the annual property tax?
Explanation
1 mill = $1 per $1,000 of assessed value. Tax = $18,000 × (50/1,000) = $18,000 × 0.05 = $900 per year.
Q3. An Alabama property has a net operating income of $45,000 and a cap rate of 7.5%. What is the property's value?
Explanation
Value = NOI ÷ Cap Rate = $45,000 ÷ 0.075 = $600,000.
Q4. A buyer in Alabama puts 10% down on a $320,000 home. What is the loan amount?
Explanation
Down payment: $320,000 × 0.10 = $32,000. Loan amount: $320,000 − $32,000 = $288,000.
Q5. An Alabama agent earns a 3% commission on a $180,000 sale. How much is the commission?
Explanation
Commission = $180,000 × 0.03 = $5,400.
Q6. A property rents for $1,200/month. If the gross rent multiplier is 10, what is the estimated value?
Explanation
Annual rent = $1,200 × 12 = $14,400. Value = Annual rent × GRM = $14,400 × 10 = $144,000.
Q7. Annual property taxes in Alabama are $2,400. Closing is on March 31. The seller owes taxes for January 1 through March 31 (90 days). How much does the seller owe at closing?
Explanation
Daily rate: $2,400 ÷ 365 = $6.575/day. Seller's share: $6.575 × 90 days = $591.78. Using 360-day method: $2,400 ÷ 360 × 90 = $600.00. The 360-day (banker's) method gives $600.
Q8. A buyer obtains a $200,000 loan at 6% annual interest. What is the first month's interest payment?
Explanation
Monthly interest = $200,000 × (0.06 ÷ 12) = $200,000 × 0.005 = $1,000.
Q9. A lot measures 150 feet × 200 feet. How many acres is this? (1 acre = 43,560 sq ft)
Explanation
Area = 150 × 200 = 30,000 sq ft. Acres = 30,000 ÷ 43,560 = 0.689 acres ≈ 0.69 acres.
Q10. A home sells for $275,000. The seller's original purchase price was $220,000. What is the percentage of appreciation?
Explanation
Appreciation = ($275,000 − $220,000) ÷ $220,000 = $55,000 ÷ $220,000 = 0.25 = 25%.
Q11. An Alabama property has a market value of $350,000. It is assessed at 10% for tax purposes. The mill rate is 40 mills. What are the annual property taxes?
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