Real Estate Math
A Connecticut listing agent's commission is 6% on the first $300,000 and 4% on anything over $300,000. The property sells for $480,000. What is the total commission?
A$25,200✓ Correct
B$28,800
C$21,420
D$18,000
Explanation
Commission on first $300,000 = $300,000 × 6% = $18,000. Commission on remaining $180,000 = $180,000 × 4% = $7,200.
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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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