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# 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

Depreciation

Measurement

## 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
Commission
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
Loan-To-Value
Mortgages $$MLA = PV \cdot LTV$$ MLA = Maximum Loan Amount
PV = Property Value
LTV = Loan to Value Ratio
Loan-To-Value
Mortgages $$RDP=PP-MLA$$ RDP = Required Down Payment
PP = Purchase Price
MLA = Maximum Loan Amount
Loan-To-Value
Mortgages $$MIP=LA \cdot PR$$ MIP = Mortgage Insurance Premium
LA = Loan Amount
Mortgages $$LCF=PLA \cdot 1\%$$
$$LOF=LA \cdot 1\%$$
LCF = Loan Commitment Fee
PLA = Promised Loan Amount
LOF = Loan Origination Fee
LA = Loan Amount
Fees
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