Support Union Test Prep

Support us and begin preparing Ad-free for your tests with
Union Test Prep.

At Union Test Prep, we are a small team dedicated to bringing the best test-prep material to you, free of cost. But we cannot do it without your support.

Support us today and start preparing for your test without the intrusion of ads.

Support Now

Real Estate Formulas for Percentages, Interest, and Mortgages

The daily job of a real estate licensee involves calculating commissions, rates of return, simple and compound interest, down payments, loan-to-value, and many more. To ace your Real Estate Test, you’ll need to know how to calculate percentages, interest, and mortgages, and here at Union Test Prep, we have a formula chart with the essential information you need. Feel free to use it when studying, and also check out our other resources for the Real Estate Test:

FREE Study Guide, Flashcards, and Practice Questions

Also, be sure to look at our formula charts for the Real Estate Areas of:

Tax and Credit



Percentages, Interest, and Mortgages Formulas

Category Formula Symbols Comment
Percentages \(a \cdot b\% =a \cdot \frac{b}{100}\) a = any real number
b% = any percent
Remember to simplify if possible.
Percentages \(\% = \frac{\vert b-a \vert }{b} \cdot 100= \frac{c}{b} \cdot 100\) % = % increase or decrease
a = new value
b = original value
c = amount of change
Percentages \(P = T \cdot R\) P = Part
T = Total
R = Rate
Percentage of Depreciation
Percentages \(C = SP \cdot R\) C = Commission
SP = Selling Price
R = Rate
Percentages \(RR = \frac{Ic}{Iv}\) RR = Rate of Return
Ic = Income
Iv = Investment
Rate of Return
Interest \(I = P \cdot R \cdot T\) I = Simple Interest
P = Principal
R = Rate
T = Time
Simple Interest
Interest \(AI = P \cdot R\)
\(QI = AI \div 4\)
\(MI = AI \div 12\)
\(DI = AI \div 365\)
AI = Annual Interest
P = Principal
R = Rate
QI = Quarterly Interest
MI = Monthly Interest
DI = Daily Interest
Interest \(CI = P \cdot i\) CI = Compound Interest
P = Principal
i = interest rate divided by
conversion periods per year
Interest \(S = P(1 + i)^n\) S = Sum = Principal+Compound Interest
P = Principal
i = interest rate divided by
conversion periods per year
n = number of conversion periods in the term
Mortgages \(DP=SP \cdot \%DPR\) DP = Down Payment
SP = Selling Price
%DPR = Down Payment Percent Required
Down Payment
Mortgages \(LTV = \frac {LA}{PV}\) LTV = Loan to Value Ratio
LA = Loan Amount
PV = Property Value
Mortgages \(MLA = PV \cdot LTV\) MLA = Maximum Loan Amount
PV = Property Value
LTV = Loan to Value Ratio
Mortgages \(RDP=PP-MLA\) RDP = Required Down Payment
PP = Purchase Price
MLA = Maximum Loan Amount
Mortgages \(MIP=LA \cdot PR\) MIP = Mortgage Insurance Premium
LA = Loan Amount
PR = Premium Rate
Mortgage Insurance Premium
Mortgages \(LCF=PLA \cdot 1\%\)
\(LOF=LA \cdot 1\%\)
LCF = Loan Commitment Fee
PLA = Promised Loan Amount
LOF = Loan Origination Fee
LA = Loan Amount
Mortgages \(LD = LA \cdot PC\) LD = Loan Discount
LA = Loan Amount
PC = Points Charged
Loan Discount Points
Mortgages \(LPTI= \frac{LP}{MI}\)

\(DTI= \frac{TMD}{MI}\)
LPTI = Loan Payment to Income Ratio
LP = Loan Payment
MI = Monthly Income
DTI = Debt to Income Ratio
TMD = Total Monthly Debt
Income Ratios
Mortgages \(MALP = (\frac{LA}{\$1000}) \cdot LF\) MALP = Monthly Amortized Loan Payment
LA = Loan Amount
LF = Loan Factor (per $1000 of loan amounts)
Amortized Loan Payment
Mortgages \(TMLP = MALP + \frac{1}{12} PT + \frac{1}{12} HI\) TMLP = Total Monthly Loan Payment
PT = Property Taxes
HI = Homeowners Insurance
PITI Payments

Keep Reading