Math questions are guaranteed on the exam. The good news: a handful of formulas cover almost all of them. Practice until they're automatic.
Must-know formulas
- Commission = Sale Price × Commission Rate.
- Area of a rectangle = Length × Width (then ÷ 43,560 for acres).
- Percentage: Part = Whole × Rate (the 'T-bar' relationship).
- Loan-to-value (LTV) = Loan Amount ÷ Value.
- Simple interest = Principal × Rate × Time.
Worked example — commission
A home sells for $420,000 with a 6% total commission, split 50/50 between two brokerages. Total commission = $420,000 × 0.06 = $25,200. Each brokerage receives $12,600 before any agent split.
Worked example — proration
Annual taxes are $3,650. Daily rate = $3,650 ÷ 365 = $10/day. If the seller owned the property for 120 days of the year before closing, the seller owes 120 × $10 = $1,200, shown as a debit to the seller and credit to the buyer (if taxes are paid in arrears).
Convert acres using 43,560 square feet per acre. Always double-check whether the question asks for monthly, annual, or daily figures.