Hawaii Real Estate Exam Math: Practice Problems With Solutions

Math appears on both sections of the Hawaii real estate exam. Hawaii-specific math may include leasehold calculations and property tax prorations. Here are the key formulas and worked examples you need to master.

Commission Calculations

Formula: Commission = Sale Price × Commission Rate

Example: A Honolulu condominium sells for $750,000 with a 5% total commission split equally between listing and buyer's broker. The listing salesperson earns 60% of the listing broker's share. How much does the salesperson earn?

Total commission: $750,000 × 0.05 = $37,500
Listing broker's share: $37,500 ÷ 2 = $18,750
Salesperson's share: $18,750 × 0.60 = $11,250

Loan-to-Value Ratio

Formula: LTV = Loan Amount ÷ Purchase Price

Example: A buyer purchases a fee simple property for $620,000 and makes a 25% down payment. What is the LTV?

Down payment: $620,000 × 0.25 = $155,000
Loan: $620,000 − $155,000 = $465,000
LTV: $465,000 ÷ $620,000 = 75%

Proration (Hawaii Uses 365-Day Year)

Example: A seller has prepaid annual property taxes of $7,300. Closing is on August 1. How much does the seller get credited for prepaid taxes (days remaining Aug 2 through Dec 31 = 152 days)?

Daily tax rate: $7,300 ÷ 365 = $20.00/day
Seller credit: $20.00 × 152 = $3,040

Leasehold Ground Rent

Example: A leasehold condo has an annual ground lease rent of $3,600. The lease is renegotiated every 5 years. If the current monthly ground rent is $300, what is the annual cost to the leaseholder?

Monthly: $300
Annual: $300 × 12 = $3,600

Bonus question: A buyer purchases a leasehold condo for $425,000. The remaining lease term is 35 years. Annual ground rent is $4,200. What is the monthly ground rent?

- $4,200 ÷ 12 = $350/month

Capitalization Rate

Formula: Value = NOI ÷ Cap Rate

Example: A Maui vacation rental generates $80,000 in Net Operating Income. Comparable properties in the area sell at a 6.5% cap rate. What is the estimated value?

- Value: $80,000 ÷ 0.065 = $1,230,769 (round to approximately $1.23 million)

Gross Rent Multiplier

Formula: GRM = Price ÷ Gross Annual Rent

Example: A property sells for $900,000 and generates $75,000 in annual gross rents. What is the GRM?

- GRM: $900,000 ÷ $75,000 = 12

Property Tax Calculation

Formula: Annual Tax = Assessed Value × Tax Rate

Example: A property is assessed at $550,000. The county tax rate is 0.35% ($3.50 per $1,000). What is the annual property tax?

- $550,000 × 0.0035 = $1,925

Area Calculations

Example: A rectangular lot is 100 feet by 140 feet. How many square feet is the lot? How many acres?

Area: 100 × 140 = 14,000 sq ft
Acres: 14,000 ÷ 43,560 = 0.32 acres

Study Tips for Hawaii Math

Leasehold math (monthly/annual ground rent) may appear on Hawaii's state section
Proration using 365 days is standard
Hawaii has high property values — don't let large numbers distract you; the formulas are the same
Write all formulas on scratch paper at the start of the exam

For more Hawaii math practice and full exams, visit [CARealestate.com/states/hawaii](https://carealestate.com/states/hawaii).