Tennessee Real Estate Math
Practice Questions & Answers (2026)
Real estate math questions appear on every Tennessee real estate exam and test a focused set of calculations: commission splits, prorations (property tax, rent, interest), loan-to-value ratios, appreciation and depreciation, and area calculations. The Tennessee Real Estate Commission (TREC) does not provide a calculator — but the math is designed to be workable without one if you know the right formulas. Tennessee candidates consistently lose points on proration questions because they apply the wrong day-count convention (360-day vs. 365-day year) or miscalculate the seller's vs. buyer's share. Work through every problem in this section until you can solve each type without hesitation.
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Tennessee Real Estate Math — Practice Questions & Answers
125 questions on Real Estate Math from the Tennessee real estate question bank. First 10 are free — sign up to unlock all 125.
Q1. A home sells for $265,000. The seller pays a 5.5% commission. What is the total commission dollar amount?
Explanation
Commission = $265,000 × 0.055 = $14,575.
Q2. Annual property taxes on a home are $3,600. The closing occurs on September 30. Using a 360-day banker's year with 30-day months, how much of the taxes is the seller responsible for (seller pays through day of closing)?
Explanation
January through September = 9 months. Daily tax rate = $3,600 ÷ 360 = $10/day. 9 months × 30 days = 270 days. Seller's share = 270 × $10 = $2,700.
Q3. A property's assessed value is $180,000 and the tax rate is $2.50 per $100 of assessed value. What are the annual property taxes?
Explanation
$180,000 ÷ $100 = 1,800. Annual taxes = 1,800 × $2.50 = $4,500.
Q4. A seller wants to net $250,000 after paying a 6% commission. What must the property sell for?
Explanation
The seller nets 94% of the sale price (100% − 6% commission). Required sale price = $250,000 ÷ 0.94 ≈ $265,957. Verify: $265,957 × 0.06 ≈ $15,957 commission; $265,957 − $15,957 = $250,000.
Q5. A rectangular parcel measures 330 feet by 660 feet. How many acres does it contain?
Explanation
Area = 330 × 660 = 217,800 sq ft. Acres = 217,800 ÷ 43,560 = 5 acres. Wait — 330 × 660 = 217,800; 217,800 ÷ 43,560 = 5.0 acres. Answer: 5 acres (option C). Verify: 1 mile = 5,280 ft; 1/16 section = 330×660 = 5 acres.
Q6. A buyer obtains a $240,000 mortgage at 6% annual interest. What is the first month's interest payment?
Explanation
Monthly interest = Principal × Annual Rate ÷ 12 = $240,000 × 0.06 ÷ 12 = $1,200.
Q7. A building has a net operating income of $48,000 per year. If the market cap rate is 8%, what is the estimated value?
Explanation
Value = NOI ÷ Cap Rate = $48,000 ÷ 0.08 = $600,000.
Q8. A Tennessee property has an appraised value of $200,000. The residential assessment ratio is 25%. The tax rate is $3.20 per $100 of assessed value. What are the annual taxes?
Explanation
Assessed value = $200,000 × 25% = $50,000. Annual tax = ($50,000 ÷ $100) × $3.20 = 500 × $3.20 = $1,600.
Q9. A property is listed at $320,000. After 60 days, the seller reduces the price by 5%. What is the new listing price?
Explanation
Price reduction = $320,000 × 0.05 = $16,000. New price = $320,000 − $16,000 = $304,000.
Q10. An investor purchases a rental property for $180,000 and spends $20,000 on improvements. After 5 years, it sells for $250,000. What is the profit (not accounting for depreciation or taxes)?
Explanation
Total cost basis = $180,000 + $20,000 = $200,000. Profit = $250,000 − $200,000 = $50,000.
Q11. A property is financed with a $150,000 loan at 7% annual interest for 30 years. The monthly P&I payment is $997.95. After the first payment, approximately how much of the payment goes to principal?
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