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, loantovalue, 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 guides, flashcards, and practice questions.
Also, be sure to look at our formula charts for the Real Estate Areas of:
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  \(\% = \frac{\vert ba \vert }{b} \cdot 100= \frac{c}{b} \cdot 100\)  % = % 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 
LoanToValue 
Mortgages  \(MLA = PV \cdot LTV\)  MLA = Maximum Loan Amount PV = Property Value LTV = Loan to Value Ratio 
LoanToValue 
Mortgages  \(RDP=PPMLA\)  RDP = Required Down Payment PP = Purchase Price MLA = Maximum Loan Amount 
LoanToValue 
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 
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 
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