TEXAS PRINCIPLES OF REAL ESTATE II

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TEXAS PRINCIPLES OF REAL ESTATE II

UPDATED ACTUAL EXAM WITH CORRECT

SOLUTIONS.

Mixed Numbers - correct answer- A number containing both a

whole number and a fraction (examples: 1⅓; 9⅞)

Improper Fractions - correct answer- a fraction with its numerator equal to or greater than its denominator

Commission Calculation - correct answer- Sales price X rate of commission = total commission

Solving for the Commission Rate - correct answer- Commission Rate = Commission ÷ Price

Solving for the Property's Price - correct answer- Price = Commission ÷ Commission Rate

Profit - correct answer- Profit (or Loss) = Selling price - Original cost 1 / 4

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Profit Percentage - correct answer- Percentage of profit = Profit ÷ Original cost

Profit Margin - correct answer- Profit margin = Profit ÷ Selling price

Interest - correct answer- the price paid for the use of borrowed money

• types of interest calculations - correct answer- Simple

interest, add-on interest, and compound interest

Simple interest - correct answer- Interest = principal x rate x time

Add-on interest - correct answer- loan amount x contracted interest rate x number of payments

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Add-on interest APR - correct answer- APR = 2 x number of payment periods in one year x total financing charges ÷ (principal, or amount borrowed x (number of scheduled payments +1)

Compound interest - correct answer- interest which is computed on the principal amount plus the accrued interest.

Compound Interest Formula - correct answer- Compound amount = Initial deposit (1 + Interest rate)n

Points - correct answer- a one-time service charge to the borrower for making the loan

Two types of points - correct answer- origination fee and discount points

Loan-to-Value Ratio (LTV) - correct answer- expresses the relationship between a property's purchase price and its loan amount.

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Loan-to-Value formula - correct answer- LTV ratio = (Loan amount ÷ Value)

Area of a rectangle - correct answer- Area = length x width

Area of a square - correct answer- Area = side x side

Area of a triangle - correct answer- Area = ½ base x height

Perimeter - correct answer- a lot or other shape is the sum of the length of all its sides.

Acre - correct answer- A measure of land equal to 43,560 square feet.

Hectare - correct answer- is equal to 10,000 square meters or approximately 2.47 acres.

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