RE 3091 REAL ESTATE PRINCIPLES
2025 STUDY GUIDE – MIDTERM EXAM
LATEST UPDATED QUESTIONS WITH
VERIFIED ANSWERS
Exam Format:
• Approximately 50 multiple choice and short answer questions (60% of grade) •
Approximately 15 calculation questions (40% of grade)
Exam Rules:
1. Turn off cell phones and put away
2. Only materials you may have out is writing utensil and financial calculator
Broad Overarching Concepts:
1. What is real estate and what are the different interests one could have in real property?
2. What are the justifications for the four basic powers of government over land use?
3. Why and where do we choose to live in cities?
4. How do you use IRR and NPV to determine whether you should invest in real estate?
5. How do we value income-producing real estate using direct capitalization and discounted
cash flow methods?
Study Advice:
• Review lesson study guides, slides, exam study guide and practice problems, quizzes,
class prep materials, peer presentations, guest speaker presentations.
• Keep broad concepts above in mind as you review. These are big picture questions and are
very likely to appear on the exam in some form.
• Make an appointment with Professor Johnson to review any questions you have regarding
the material. Come prepared with specific questions if possible.
1
, Practice Calculations
1. If your house is worth $350,000 today and it appreciates 4% annually, how much is your
house worth in 30 years? Solve for FV.
2. You are a landlord and have determined that your tenants need to pay their $750 per
month rent on the first day of each month. If you deposit each monthly rental payment
into an interest-bearing account that pays an annual rate of 5% but is compounded
monthly, how much will be in the account at the end of 12 months?
3. If you are a mortgage lender, what is the most you are willing to lend a borrower in the
following situation? The borrower has promised to pay you $13,000 at the end of each
year for 20 years, and you want to earn a 12% annual rate of return.
4. What is your annual return if you deposit $1,200 today and withdraw a $2,000 lump sum
payment in eight years?
5. Suppose you own an apartment building and you need $50,000 to replace the carpet
throughout the entire building. If you can save $2,500 a month and the account pays 1.5%
interest compounded monthly, in how many months will you have enough in your
account to replace all of the carpeting?
6. What is the NPV of the following uneven cash flow example?
2
2025 STUDY GUIDE – MIDTERM EXAM
LATEST UPDATED QUESTIONS WITH
VERIFIED ANSWERS
Exam Format:
• Approximately 50 multiple choice and short answer questions (60% of grade) •
Approximately 15 calculation questions (40% of grade)
Exam Rules:
1. Turn off cell phones and put away
2. Only materials you may have out is writing utensil and financial calculator
Broad Overarching Concepts:
1. What is real estate and what are the different interests one could have in real property?
2. What are the justifications for the four basic powers of government over land use?
3. Why and where do we choose to live in cities?
4. How do you use IRR and NPV to determine whether you should invest in real estate?
5. How do we value income-producing real estate using direct capitalization and discounted
cash flow methods?
Study Advice:
• Review lesson study guides, slides, exam study guide and practice problems, quizzes,
class prep materials, peer presentations, guest speaker presentations.
• Keep broad concepts above in mind as you review. These are big picture questions and are
very likely to appear on the exam in some form.
• Make an appointment with Professor Johnson to review any questions you have regarding
the material. Come prepared with specific questions if possible.
1
, Practice Calculations
1. If your house is worth $350,000 today and it appreciates 4% annually, how much is your
house worth in 30 years? Solve for FV.
2. You are a landlord and have determined that your tenants need to pay their $750 per
month rent on the first day of each month. If you deposit each monthly rental payment
into an interest-bearing account that pays an annual rate of 5% but is compounded
monthly, how much will be in the account at the end of 12 months?
3. If you are a mortgage lender, what is the most you are willing to lend a borrower in the
following situation? The borrower has promised to pay you $13,000 at the end of each
year for 20 years, and you want to earn a 12% annual rate of return.
4. What is your annual return if you deposit $1,200 today and withdraw a $2,000 lump sum
payment in eight years?
5. Suppose you own an apartment building and you need $50,000 to replace the carpet
throughout the entire building. If you can save $2,500 a month and the account pays 1.5%
interest compounded monthly, in how many months will you have enough in your
account to replace all of the carpeting?
6. What is the NPV of the following uneven cash flow example?
2
