Lesson 19: Real Estate Math - Metro Brokers

1 1 Lesson 19: Lesson 19: real Estate MathReal Estate MathReal Estate Principles of Georgia 553 1 of 162 Copyright 2006, Rockwell Publishing, math ProblemsFour the numbers in the problem into the Copyright 2006, Rockwell Publishing, math ProblemsUsing formulasEach of these choices expresses the same formula, but in a way that lets you solve it for A, B, or C:A = B CB = A CC = A B 555 2 Copyright 2006, Rockwell Publishing, math ProblemsUsing formulasIsolate the unknown is the element that you re trying to unknown should always sit alone on one side of the equals the information that you already know should be on the other side. 555 Copyright 2006, Rockwell Publishing, math ProblemsUsing formulasExample: What is the length of a property that is 9,000 square feet and 100 feet wide? yThe formula for area is A = L is the unknown, so switch the formula to L = A = 9,000 10090 = 9,000 100556 Copyright 2006, Rockwell Publishing, NumbersConverting fraction to decimalCalculators use only decimals, not a problem contains a fraction, convert it to a decimal:yDivide the top number (the numerator) by the bottom number (the denominator).

2 1/4 = 1 4 = = 1 3 = = 5 8 = 3 Copyright 2006, Rockwell Publishing, NumbersConverting decimal to percentageTo convert a decimal to a percentage, move the decimal point two places to the right and add a percent = 2% = 80% = 123% 556 Copyright 2006, Rockwell Publishing, convert a percentage to a decimal, reverse the process:yMove the decimal point two places to the left and remove the percent = = = To convert a percentage to a decimal, reverse the process:yMove the decimal point two places to the left and remove the percent = = = Decimal NumbersConverting percentage to decimal557 Copyright 2006, Rockwell Publishing, math Problems Read problem Write formula and isolate the unknown Substitute Calculate Fractions Decimal numbers Percentages Conversion4 Copyright 2006, Rockwell Publishing, ProblemsFormula: A = L WTo determine the area of a rectangular or square space, use this formula:A = L WArea =WidthLength 559 Copyright 2006, Rockwell Publishing, ProblemsYou might also be asked to factor other elements into an area problem, such as: cost per square foot, rental rate, or the amount of the broker s commission.

3 559 Copyright 2006, Rockwell Publishing, ProblemsExampleAn office is 27 feet wide by 40 feet long. It rents for $2 per square foot per month. How much is the monthly rent?yPart 1: Calculate areaA = 27 feet 40 feetA = 1,080 square feetyPart 2: Calculate rentRent = 1,080 $2 Rent = $2,160559 5 Copyright 2006, Rockwell Publishing, ProblemsSquare yardsSome problems express area in square yards rather than square feet. Remember: 1 square yard = 9 square feety1 yard is 3 feety1 square yard measures 3 feet on each sidey3 feet 3 feet = 9 square feetSome problems express area in square yards rather than square feet. Remember: 1 square yard = 9 square feety1 yard is 3 feety1 square yard measures 3 feet on each sidey3 feet 3 feet = 9 square feet559 Copyright 2006, Rockwell Publishing, ProblemsMiles / Acres 1 mile = 5,280 feet 1 acre = 43,560 square feet Copyright 2006, Rockwell Publishing, ProblemsTriangle formula: A = B HTo determine the area of a right triangle, use this formula:A = B H Right triangle: a triangle with a90 angle 559 6 Copyright 2006, Rockwell Publishing, a rectangle, then cut it in half diagonally.

4 What s left is a right you re finding the area of a right triangle, it doesn t matter at what point in the formula you cut the rectangle in half any of these variations will reach the same result:Area of a TriangleA = B H A = B H A = (B H) 2 560 Copyright 2006, Rockwell Publishing, triangular lot is 140 feet long and 50 feet wide at its base. What is the area?yDo the calculation in any of the following ways to get the correct answer. TrianglesExample560 Copyright 2006, Rockwell Publishing, triangular lot is 140 feet long and 50 feet wide at its base. What is the area?Variation 1:A = ( 50) 140A = 25 140A = 3,500 sq. feetTrianglesExample, continued560 7 Copyright 2006, Rockwell Publishing, triangular lot is 140 feet long and 50 feet wide at its base. What is the area?Variation 2:A = 50 ( 140)A = 50 70A = 3,500 sq. feetTrianglesExample, continued560 Copyright 2006, Rockwell Publishing, triangular lot is 140 feet long and 50 feet wide at its base.

5 What is the area?Variation 3:A = (50 140) 2A = 7,000 2A = 3,500 sq. feetTrianglesExample, continued560 Copyright 2006, Rockwell Publishing, ProblemsOdd shapesTo find the area of an irregular the figure up into squares, rectangles, and right the area of each of the shapes that make up the the areas 8 Copyright 2006, Rockwell Publishing, lot s western side is 60 feet long. Its northern side is 100 feet long, but its southern side is 120 feet long. To find the area of this lot, break it into a rectangle and a ShapesExample561 Copyright 2006, Rockwell Publishing, of rectangleA = 60 100A = 6,000 sq. feetOdd ShapesExample, continued561 Copyright 2006, Rockwell Publishing, find the length of the triangle s base, subtract length of northern boundary from length of southern 100 = 20 feetArea of triangle:A = ( 20) 60A = 600 sq. feet Odd ShapesExample, continued561 9 Copyright 2006, Rockwell Publishing, area:6,000 + 600 = 6,600 sq.

6 Feet Odd ShapesExample, continued561 Copyright 2006, Rockwell Publishing, common mistake when working with odd shapes is to calculate the area of part of the figure twice. This can happen with a figure like this one. Odd ShapesAvoid counting same section twice561 Copyright 2006, Rockwell Publishing, s the wrong way to calculate the area of this 50 = 1,25040 20 = 8001,250 + 800 = 2,050By doing it this way, you measure the middle of the shape ShapesAvoid counting same section twice561 10 Copyright 2006, Rockwell Publishing, the problem by breaking the shape down like this height of smaller rectangle by subtracting height of top rectangle (25 feet) from height of the whole shape (40 feet).40 25 = 15 feetOdd ShapesAvoid counting same section twice561 Copyright 2006, Rockwell Publishing, calculate the area of each rectangle and add them together:25 50 = 1,250 sq. 15 = 300 sq. ,250 + 300 = 1,550 sq. ShapesAvoid counting same section twice561 Copyright 2006, Rockwell Publishing, s another way to break the odd shape down into rectangles find width of the rectangle on the right, subtract width of left rectangle from width of whole shape:50 20 = 30 feetOdd ShapesAvoid counting same section twice561 11 Copyright 2006, Rockwell Publishing, calculate the area of each rectangle and add them together:40 20 = 800 sq.

7 25 = 750 sq. + 750 = 1,550 sq. ShapesAvoid counting same section twice561 Copyright 2006, Rockwell Publishing, ShapesNarrative problemsSome area problems are expressed only in narrative form, without a that case, draw the shape yourself and then break the shape down into rectangles and triangles. Copyright 2006, Rockwell Publishing, lot s boundary begins at a certain point and runs due south for 319 feet, then east for 426 feet, then north for 47 feet, and then back to the point of solve this problem, first draw the shape. Odd ShapesExample12 Copyright 2006, Rockwell Publishing, lot s boundary begins at a certain point and runs due south for 319 feet, then east for 426 feet, then north for 47 feet, and then back to the point of ShapesExample Copyright 2006, Rockwell Publishing, it down into a rectangle and a triangle as shown. Subtract 47 from 319 to find the height of the triangular 47 = 272 feetOdd ShapesExample, continued Copyright 2006, Rockwell Publishing, the area of the 47 = 20,022 sq.

8 ShapesExample, continued13 Copyright 2006, Rockwell Publishing, the area of the triangle.( 426) 272 = 57,936 sq. feetOdd ShapesExample, continued Copyright 2006, Rockwell Publishing, together the area of the rectangle and the triangle to find the lot s total square ,022 + 57,936 = 77,958 sq. feetOdd ShapesExample, continued Copyright 2006, Rockwell Publishing, ProblemsArea:A measurement of two-dimensional :A measurement of three-dimensional , length, and heightyCubic feet instead of square feet 562 14 Copyright 2006, Rockwell Publishing, ProblemsFormula: V = L W HTo calculate volume, use this formula:V = L W HVolume = Length Width Height562 Copyright 2006, Rockwell Publishing, ProblemsCubic yardsIf you see a problem that asks for cubic yards, remember that there are 27 cubic feet in a cubic yard:3 feet 3 feet 3 feet = 27 cubic feet 562 Copyright 2006, Rockwell Publishing, ProblemsExampleA trailer is 40 feet long, 9 feet wide, and 7 feet high.

9 How many cubic yards does it contain?40 9 7 = 2,520 cubic feet2,520 27 = cubic yards562 15 Copyright 2006, Rockwell Publishing, and Volume Area of a square or rectangle: A = L W Area of a right triangle: A = B H Divide odd shapes into squares, rectangles, and triangles Volume: V = L W H Square feet, square yards, cubic feet, cubic yards, miles, acres Copyright 2006, Rockwell Publishing, ProblemsMany math problems ask you to find a certain percentage ofanother means that you will need to multiply the percentage by that other Copyright 2006, Rockwell Publishing, ProblemsWorking with percentagesPercentage problems usually require you to change percentages into decimals and/or decimals into : What is 85% of $150,000?.85 $150,000 = $127,500 Percentage problems usually require you to change percentages into decimals and/or decimals into : What is 85% of $150,000?.85 $150,000 = $127,500 563 16 Copyright 2006, Rockwell Publishing, ProblemsExampleOne common example of a percentage problem is calculating a commission.

10 Example: A home sells for $300,000. The listing broker is paid a 6% commission on the sales price. The salesperson is entitled to 60% of that commission. How much is the salesperson s share?$300,000 .06 = $18,000$18,000 .60 = $10,800 563 Copyright 2006, Rockwell Publishing, ProblemsFormula: W % = PBasic formula for solving percentage problems:Whole Percentage = PartW % = P 563 Copyright 2006, Rockwell Publishing, whole is the larger figure, such as the property s sale part is the smaller figure, such as the commission on the problem, the percentage may be referred to as the rate. yExamples: a 7% commission rate, a 5% interest rate, a 10% rate of returnPercentage ProblemsFormula: W % = P563 17 Copyright 2006, Rockwell Publishing, that you ll also use the percentage formula when you re asked to calculate interest or : A lender makes an interest-only loan of $140,000. The interest rate is How much is the annual interest?