Real Estate Math
An agent earns a 3% commission on both sides of a transaction. The home sold for $425,000. How much did the agent earn in total?
A$12,750
B$25,500✓ Correct
C$8,500
D$17,000
Explanation
Total commission = $425,000 × 6% = $25,500. Or: $425,000 × 3% × 2 = $25,500.
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Key Terms to Know
Amortization
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.
Math Concepts
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