A home was purchased for $225,000 and sold 4 years later for $270,000. What was the percentage appreciation over the entire 4-year period?
Why 20.0% Is Correct
Answer B: 20.0%
Exam Tip: Real Estate Math
Math questions are formula-based. Memorize the key formulas: commission splits, proration, cap rate (NOI ÷ Value), GRM (Price ÷ Gross Rent), and LTV (Loan ÷ Value). Practice converting between annual and monthly figures.
People Also Study
Related Alabama Questions
- A property was purchased for $180,000 and sold 3 years later for $216,000. What was the percentage gain?Real Estate Math
- A property purchased for $280,000 with improvements costing $45,000 was sold 2 years later for $370,000. What is the total gain?Property Valuation
- In Alabama, which approach to value is most appropriate for a single-family home in a residential neighborhood?Property Valuation
- A home sells for $275,000. The seller's original purchase price was $220,000. What is the percentage of appreciation?Real Estate Math
- An investor buys a property for $425,000 and sells it 3 years later for $510,000. What is the percentage gain?Real Estate Math
- An Alabama property owner who rents out a single-family home without using a real estate agent is exempt from the Fair Housing Act ONLY if they:Fair Housing
- An investor purchased a property for $400,000 and sold it for $460,000. What is the percentage profit?Real Estate Math
- In Alabama, a homeowner who has not paid property taxes for an extended period may have their property sold at a:Property Ownership
Key Terms to Know
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Study This Topic
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →