Real Estate Math
A Nebraska buyer closes on a home on May 15. The seller prepaid the annual insurance premium of $1,560 for the full year (January through December). How much is the seller credited for the prepaid insurance from May 15 through December 31?
A$975✓ Correct
B$780
C$850
D$945
Explanation
Daily rate = $1,560 ÷ 365 = $4.27/day. May 16 through Dec 31 = 230 days. Seller credit = 230 × $4.27 ≈ $982.11. Using 360-day method: $1,560 ÷ 12 = $130/month. Remaining months (mid-May through Dec) ≈ 7.5 months × $130 = $975. Closest: $910.
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