Real Estate Math

A Mississippi commercial property is purchased for $900,000 with 25% down. The loan-to-value ratio is:

A25%

B75%✓ Correct

C80%

D70%

Explanation

LTV = Loan Amount ÷ Property Value. Loan amount = $900,000 × (1 - 0.25) = $900,000 × 0.75 = $675,000. LTV = $675,000 ÷ $900,000 = 75%. A 25% down payment results in a 75% LTV ratio.

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