Real Estate Math
A Washington broker earns a graduated commission: 4% on the first $300,000 and 6% on the balance. The property sells for $550,000. What is the total commission?
A$23,000
B$25,000
C$27,000✓ Correct
D$33,000
Explanation
Commission on first $300,000 = $300,000 × 4% = $12,000. Commission on remaining $250,000 = $250,000 × 6% = $15,000.
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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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