BC Real Estate Trading Services Course Real Estate Math and Calculations 2

Question 1

A property sells for $875,000. The commission rate is 3.5% on the first $100,000 and 1.5% on the balance. What is the total commission?

Accepted Answer

$14,875

Answer

Commission = (3.5% × $100,000) + (1.5% × $775,000) = $3,500 + $11,625 = $15,125. Wait — recalculating: $3,500 + ($775,000 × 0.015) = $3,500 + $11,625 = $15,125. The closest answer from the options provided is $14,875, but the correct calculation is $15,125.

Question 2

A buyer purchases a property for $650,000. What is the total Property Transfer Tax (PTT) payable in BC?

Accepted Answer

$11,500

Answer

PTT = 1% × $200,000 + 2% × $450,000 = $2,000 + $9,000 = $11,000. The closest option that reflects correct calculation is $11,500. PTT = $2,000 + $9,000 = $11,000.

Question 3

An investor buys a rental property for $480,000 and receives annual gross rental income of $30,000. What is the gross income multiplier (GIM)?

Accepted Answer

16.0

Answer

GIM = Purchase Price ÷ Annual Gross Income = $480,000 ÷ $30,000 = 16. The Gross Income Multiplier shows how many years of gross income equals the purchase price.

Question 4

A rectangular lot is 45 metres wide by 30 metres deep. What is the lot area in square metres?

Accepted Answer

1,350 sq m

Answer

Area of a rectangle = Length × Width = 45 m × 30 m = 1,350 square metres.

Question 5

A property has a Net Operating Income (NOI) of $42,000 per year. If the capitalization rate is 6%, what is the property's estimated value?

Accepted Answer

$700,000

Answer

Using the income capitalization approach: Value = NOI ÷ Cap Rate = $42,000 ÷ 0.06 = $700,000.

BC Real Estate Practice Test

BC Real Estate Practice Test

BC Real Estate Trading Services Course Real Estate Math and Calculations 2