Arkansas Real Estate Exam Math: Commission, Proration & Cap Rate

Math appears throughout Arkansas's 130-question exam. Here are the key formulas with worked examples.

Commission

Example: Property sells for $280,000. Commission 5.5%, split 50/50. Listing agent earns 55%. - Total: $280,000 × 0.055 = $15,400 - Listing side: $7,700 - Agent: $7,700 × 0.55 = $4,235

Proration (360-day year unless stated otherwise)

Example: Taxes $3,240. Closing March 31. - Daily: $3,240 ÷ 360 = $9/day - Seller's days (Jan–Mar): 90 days - Seller's credit to buyer: 90 × $9 = $810

Cap Rate

Example: Small apartment generates $36,000 NOI. Cap rate 7%. - Value = $36,000 ÷ 0.07 = $514,286

Net to Seller

Example: Seller wants $195,000 net after 6% commission. - Sale Price = $195,000 ÷ 0.94 = $207,446.81

LTV

Example: $235,000 home, $47,000 down. - Loan: $188,000 - LTV: $188,000 ÷ $235,000 = 80% → No PMI (exactly at threshold)

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