Real Estate Math
A Maine property's square footage is 2,150 sq ft. If the listing agent erroneously advertises it as 2,500 sq ft and the buyer pays $225 per square foot based on that figure, the buyer overpaid by:
A$56,250
B$63,750
C$78,750✓ Correct
D$86,250
Explanation
Overpayment = Difference in sq ft × Price per sq ft = (2,500 − 2,150) × $225 = 350 × $225 = $78,750.
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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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