8 Introduction To RE Finance

8 Introduction To RE Finance - INEEDMONEY! 1 CHAPTER6...

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1 I  NEED  MONEY!
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2 CHAPTER  6   HERE  ARE  THE  ANSWERS
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3 1. An investor is thinking about purchasing an  older four-unit apartment.  Each unit rented  for $600 per month, with a vacancy factor of  5% and operating expenses of $8,000  annually.  To realize a capitalization rate of  10%, how much should the investor pay for  the property? a. $127,500 b. $105,000 c. $179,300 d. $193,600 D
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4 2. Ms. B sold her vacant lot for $63,000.  This  was 20% more than she paid.  The  commission to the broker and other selling  costs amounted to 6% of the selling price.   How much was her profit? a. $12,600 b. $6,720 b. $15,250 d. $5,250 B
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5 3. Mr. a wishes to place a lump sum into a  savings account that will pay 6% interest.  He  hopes to earn $150 in monthly interest.  To  realize this monthly interest income, how  much must he deposit? a. $15,000 b. $9,000 c. $25,000 d. $30,000 D
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6 4.  Mr. Jones purchased a small home for  $70,000; she assumed an existing loan for  $40,000.  The seller agrees to pay the  documentary transfer tax.  What is the tax? a. $77.00 b. $33.00 c. $45.00 d. $154.00 D
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7 5. Mr. and Mrs. Chu paid their annual  property taxes of $720.  They sold their home  on April 1.  On the settlement sheet, what  entry would be made?    a. Debit the seller $180 b. Credit the seller $240 c. Credit the buyer $180 d. Credit the seller $180
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8 6.  Mr. Brown sold his rural cabin for $60,000.   He purchased it one year ago for   $40,000.   What percentage gross profit did he realize on  the sale? a. 66% b. 50% c. 331/3% d. 48% B
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9 7.  Broker Santos listed a home and the seller  agreed to pay a 6% commission.  If the  commission amounted to $18,000, what was  the listing price? a. $108,000 b. $195,000 c. $300,000 d. $405,000 C
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10 8.  If you were to borrow $42,000 and make fully  amortized payments for 15 years including 9%  interest, using the amortization table what  would be your monthly payments? a. $426.30 b. $10.15 c. $375.20 d. $315.00 A
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11 9. If you owned a four-acre parcel of land and  wished to divide it into eight equal lots each  400 feet deep, what would by the width of  each lot? a. 55.40 feet b. 54.45 feet c. 435.6 feet d. 45.54 feet B
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10. A payment of $840 per month principal and  interest is made on a $66,000 loan, which  includes interest at 10%.  How much of the  payment is principal the first month? a. $550
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8 Introduction To RE Finance - INEEDMONEY! 1 CHAPTER6...

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