Real Estate Math
An owner purchased land for $80,000. A developer offers to purchase it for $120,000. What is the percent profit?
A33.3%
B50%✓ Correct
C40%
D25%
Explanation
Profit = $120,000 − $80,000 = $40,000. Percent profit = $40,000 ÷ $80,000 = 50%.
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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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