real estate test questions mi multiple choice ques
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PSI Real Estate Practice Michigan
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REAL ESTATE TEST QUESTIONS MI
MULTIPLE CHOICE QUESTIONS,
MULTIPLE CHOICE - REAL
ESTATECALCULATIONS
Quarterly interest due on a $185,000 loan is $2,775. What is the annual interest rate? A. 6% B. 1.5% C.
3% D. 2% - correct answer ✔✔(A) Hint: the interest rate is annual; therefore, you cannot divide quarterly
interest paid by annual interest rate. $2,775 x 4 = $11,100 annual interest paid $11,100 ÷ $185,000 = .06
= 6%
Property tax of $4660/yr. paid in advance based on exact days method (calendar year). The seller stayed
6 months and sold the property. What is the proration at closing? A. $2,330 credit buyer and debit seller
B. $2,330 debit buyer and credit seller C. $4,600 debit the buyer and credit seller D. $4,600 debit seller
and credit buyer - correct answer ✔✔- (B) If the seller only stayed six months, there is no need to
complicate the issue and count the number of days in each month, one half of $4660 is equal to $2330
that the buyer must reimburse the seller, i.e. debit the buyer and credit that amount to the seller.
- Property tax $2,646.25 payable in advance (calendar year) but delinquent. Using exact days method
what proration is due if closing is scheduled April 28? A. $848.25 debit seller B. $848.25 debit buyer C.
$1,798 debit seller D. $1,798 debit buyer - correct answer ✔✔(A) The seller has failed to pay his taxes;
therefore, he owes property taxes from January 1 to April 27 (buyer is responsible for April 28 the closing
date). The daily tax is calculated as $2,646.25 ÷ 365 days = $7.25 so the number of days add up to
31+28+31+27=117 days x $7.25= $848.25 which will be debited to the seller.
Property sold for $72,650. Commission 6%. Calculate the transfer tax due to the county and the state A.
$ 312.39 B. $ 624.79 C. $ 627.80 D. $ 619.20 - correct answer ✔✔- (C) Hint: the commission amount has
nothing to do with the transfer tax because the tax is paid on the total selling price regardless of
commission. The price must also be rounded up to the next $500. Transfer tax is $4.30 for each $500 of
the price. $72,650 is rounded to $73,000 $73,000 ÷ $500 = 146 x $4.30 = $627.80
If price is $128,000 and loan-to-value ratio is 75% with 3 points, how much in points is due at closing? A.
$2,880 B. $3,840 C. $3,280 D. $1,840 - correct answer ✔✔- (A) Hint: Points are paid on the loan amount,
not on the purchase price. $128,000 x 75% = $96,000 is the loan amount $96,000 x 3% = $2,880 points
due
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