Math Final CRES Exam with Complete
Solutions
In order for the seller to sell his property, he must replace the carpet in the living room.
What would it cost to put new carpet in the room measuring 15 feet by 20 feet if the
carpet costs $26.95 per square yard, plus $450 installation charge? - ANS-It is the
square yard conversion that got ya'. There are 9 square feet in a square yard, it's
because 1 yard is 3 feet and in a square all sides are equal in length, which makes 1 sq.
yard equals to 3 * 3 = 9 square feet. Soz,the calculation for this questions is 15 sq ft x
20 sq ft = 300 sq.ft. 300sq ft / 9 ( here it is - a square yard is 3 yards by 3 yards or 9
square feet a side) = 33.33 sq yds x $26.95 = $898.33 + $450 = $1348.33
Purchase price is $180,000 and buyer has a 90% loan at 7%; if the closing is July 7 how
will the interest be shown on the settlement sheet? - ANS-$776.71 debit to the buyer,
credit to the broker
A $175 water bill is paid on June 1 for three months, the home is sold and the closing is
August 25. How is this shown on the settlement statement? - ANS-$13.31 credit to the
seller, debit to the buyer
A house is sold on June 15. The annual taxes of $850 for the current year have not
been paid. What does the seller owe the buyer at closing? - ANS-384.25
Mr. Jones has a property valued at $150,000. The 2003 taxes were 27.65 mills. In 2004
the mill levy was reduced to 25 mills but the assessed value increased 10%. Did the
taxes: - ANS-see which one results in the lowest tax bill -
2003: $150,000 x .02765 = $4147.50 tax bill
2004: $165,000 x .025 = $4125 tax bill
decrease
If the scale drawing for a lot is 3 inches by 4 inches and the actual lot is 90 feet x 120
feet, how many feet would be represented by 5 1/4 inches? - ANS-157.50 feet
The new owner of a house needs hazard coverage for $98,000. The annual premium is
$0.44 per $100.00 of the amount insured. The insurance company agreed to make the
cost of the policy 2 ½ times the annual rate for a 3 year policy. How much would the
monthly insurance payments be to pay for this policy? - ANS-$98, = 980 X
$.44 = $431.20 X 2.5 =$1, = $29.94
How many 50-foot by 110-foot lots could be obtained from an acre of land? - ANS-7
, The owner of a commercial warehouse has the building listed for $250,000. The net
income of the building is $20,000. An investor wants to buy it at a cap rate of 12%. Will
the investor offer the owner the same price as the owner has it listed for? If not, by how
much will the owner have to change his price to meet the investor's request for a 12%
cap rate? - ANS-Buyer's offer indicates a value of: V= I/ R = $20,000 / .12 = $166,667
No! He does not like the listed price of $250,000. Seller would have to lower his price
by:$250,000 - $166,667 = $83,333
Ms. Nation, an eligible veteran, made an offer of $95,000 to purchase a condo she will
finance with a VA-guaranteed loan. Four weeks after the offer was accepted, a
certificate of reasonable value (CRV) for $92,000 was issued for the property. In this
case: - ANS-the veteran may withdraw from the transaction without penalty or negotiate
with the seller to reduce the price to $92,000
As a property manager, you have an agreement that your fee will be 8% on the first
$150,000 gross rent, 5% on the next $100,000, and 2.5% on everything over the
$250,000. If last year's gross rent was $417,500 what was the management fee? - ANS-
First calculate the commission earned on the first tier - ($150,000 X .08 = $12,000
commission) then calculate the commission on the second tier - ($100,000 X .05 =
$5,000) then calculate the amount of the remaining gross rent over $250,000 -
($417,500 - ($150,000 + $100,000) = $167,500) then calculate the commission on the
remaining amount ($167,500 X .025 = $4,187.50). Add the commissions together
$12,000 + $5,000 + $4,187.50 = $21,187.50 total management fee
The potential gross income of a warehouse is $4,200 a month and the vacancy rate is 2
1/2%. The taxes are $3750, the monthly maintenance costs are $350, monthly reserves
for replacement are $250, depreciation is $575 a month, management fees are $500
per month, debt service is $1200 per month and the quarterly landscaping fees are
$600. If the cap rate is 12.5% what is the estimated value of the warehouse? - ANS-Part
1 $4,200 X 12 = $50,400 X .025 = $1,260 Part 2 $50,400 - $1,260 = $49,140 - ($350 X
12 = $4,200) - $3,750 - ($250 X 12 = $3,000) - ($500 X 12 = $6,000) - ($600 X 4 =
$2,400) = $29,790 / .125 = $238,320
Since Cap Rate uses income, it is only used for income producing properties, not for
example, the home you are buying for yourself. First let's define cap rate AKA
Capitalization Rate: Cap rate indicates how fast an investment will pay for itself. For
example, a 10% Cap Rate means you will get 10% of your purchase price back each
year. If a commercial apartment building is purchased for $5,000,000 and it generates
$500,000 a year in net operating income (the dollars left over after operating costs are
subtracted from your gross income), then:
$500,000 / $5,000,000 = 10% cap rate
A 6 foot wide sidewalk is to be poured on the inside of a corner lot that measures 50
feet by 100 feet. If the cost of the sidewalk is $0.68 per sq. ft., how much will the
sidewalk cost? - ANS-50 X 6 = 300 + (94 X 6 =564) = 864 sq ft X $.68 = $587.52
Solutions
In order for the seller to sell his property, he must replace the carpet in the living room.
What would it cost to put new carpet in the room measuring 15 feet by 20 feet if the
carpet costs $26.95 per square yard, plus $450 installation charge? - ANS-It is the
square yard conversion that got ya'. There are 9 square feet in a square yard, it's
because 1 yard is 3 feet and in a square all sides are equal in length, which makes 1 sq.
yard equals to 3 * 3 = 9 square feet. Soz,the calculation for this questions is 15 sq ft x
20 sq ft = 300 sq.ft. 300sq ft / 9 ( here it is - a square yard is 3 yards by 3 yards or 9
square feet a side) = 33.33 sq yds x $26.95 = $898.33 + $450 = $1348.33
Purchase price is $180,000 and buyer has a 90% loan at 7%; if the closing is July 7 how
will the interest be shown on the settlement sheet? - ANS-$776.71 debit to the buyer,
credit to the broker
A $175 water bill is paid on June 1 for three months, the home is sold and the closing is
August 25. How is this shown on the settlement statement? - ANS-$13.31 credit to the
seller, debit to the buyer
A house is sold on June 15. The annual taxes of $850 for the current year have not
been paid. What does the seller owe the buyer at closing? - ANS-384.25
Mr. Jones has a property valued at $150,000. The 2003 taxes were 27.65 mills. In 2004
the mill levy was reduced to 25 mills but the assessed value increased 10%. Did the
taxes: - ANS-see which one results in the lowest tax bill -
2003: $150,000 x .02765 = $4147.50 tax bill
2004: $165,000 x .025 = $4125 tax bill
decrease
If the scale drawing for a lot is 3 inches by 4 inches and the actual lot is 90 feet x 120
feet, how many feet would be represented by 5 1/4 inches? - ANS-157.50 feet
The new owner of a house needs hazard coverage for $98,000. The annual premium is
$0.44 per $100.00 of the amount insured. The insurance company agreed to make the
cost of the policy 2 ½ times the annual rate for a 3 year policy. How much would the
monthly insurance payments be to pay for this policy? - ANS-$98, = 980 X
$.44 = $431.20 X 2.5 =$1, = $29.94
How many 50-foot by 110-foot lots could be obtained from an acre of land? - ANS-7
, The owner of a commercial warehouse has the building listed for $250,000. The net
income of the building is $20,000. An investor wants to buy it at a cap rate of 12%. Will
the investor offer the owner the same price as the owner has it listed for? If not, by how
much will the owner have to change his price to meet the investor's request for a 12%
cap rate? - ANS-Buyer's offer indicates a value of: V= I/ R = $20,000 / .12 = $166,667
No! He does not like the listed price of $250,000. Seller would have to lower his price
by:$250,000 - $166,667 = $83,333
Ms. Nation, an eligible veteran, made an offer of $95,000 to purchase a condo she will
finance with a VA-guaranteed loan. Four weeks after the offer was accepted, a
certificate of reasonable value (CRV) for $92,000 was issued for the property. In this
case: - ANS-the veteran may withdraw from the transaction without penalty or negotiate
with the seller to reduce the price to $92,000
As a property manager, you have an agreement that your fee will be 8% on the first
$150,000 gross rent, 5% on the next $100,000, and 2.5% on everything over the
$250,000. If last year's gross rent was $417,500 what was the management fee? - ANS-
First calculate the commission earned on the first tier - ($150,000 X .08 = $12,000
commission) then calculate the commission on the second tier - ($100,000 X .05 =
$5,000) then calculate the amount of the remaining gross rent over $250,000 -
($417,500 - ($150,000 + $100,000) = $167,500) then calculate the commission on the
remaining amount ($167,500 X .025 = $4,187.50). Add the commissions together
$12,000 + $5,000 + $4,187.50 = $21,187.50 total management fee
The potential gross income of a warehouse is $4,200 a month and the vacancy rate is 2
1/2%. The taxes are $3750, the monthly maintenance costs are $350, monthly reserves
for replacement are $250, depreciation is $575 a month, management fees are $500
per month, debt service is $1200 per month and the quarterly landscaping fees are
$600. If the cap rate is 12.5% what is the estimated value of the warehouse? - ANS-Part
1 $4,200 X 12 = $50,400 X .025 = $1,260 Part 2 $50,400 - $1,260 = $49,140 - ($350 X
12 = $4,200) - $3,750 - ($250 X 12 = $3,000) - ($500 X 12 = $6,000) - ($600 X 4 =
$2,400) = $29,790 / .125 = $238,320
Since Cap Rate uses income, it is only used for income producing properties, not for
example, the home you are buying for yourself. First let's define cap rate AKA
Capitalization Rate: Cap rate indicates how fast an investment will pay for itself. For
example, a 10% Cap Rate means you will get 10% of your purchase price back each
year. If a commercial apartment building is purchased for $5,000,000 and it generates
$500,000 a year in net operating income (the dollars left over after operating costs are
subtracted from your gross income), then:
$500,000 / $5,000,000 = 10% cap rate
A 6 foot wide sidewalk is to be poured on the inside of a corner lot that measures 50
feet by 100 feet. If the cost of the sidewalk is $0.68 per sq. ft., how much will the
sidewalk cost? - ANS-50 X 6 = 300 + (94 X 6 =564) = 864 sq ft X $.68 = $587.52
