National practice guide

Set up the relationship before touching the calculator

Real estate math is usually a reading test with arithmetic attached. Most wrong answers come from using the wrong base, reversing a percentage, mixing annual and monthly figures, counting the wrong days, or answering for the wrong party. A six-line setup prevents more misses than memorizing another trick. When answer choices are close, keep full calculator precision until the final step and follow the rounding instruction in the question. When choices are far apart, estimate first so an extra zero or reversed division cannot survive unnoticed.

Last updated: August 1, 2026

What skill does this practice set measure?

Short answer: Use the same workflow for every calculation: target, facts, units, formula, estimate, calculation, verification. Seller net starts with sale price and subtracts seller debits. Buyer funds starts with down payment and buyer costs, then subtracts deposits and credits. Proration starts with annual or periodic amount, correct day convention, ownership period, and debit-credit direction. PITI converts annual taxes and insurance to monthly figures before addition. Equity is value minus debt. Capitalization rate is NOI divided by value. LTV is loan amount divided by value as defined by the question. Discount points and origination fees are percentages of the loan amount. Transfer fees use the rate, taxable consideration, bracket rule, and responsible party stated by the governing law or problem. Before calculating, circle the requested output and write its unit: dollars, percent, days, square feet, acres, or monthly payment. Normalize time periods before combining figures. Convert annual taxes to a daily or monthly amount only once, and keep dollar totals separate from rates. For a closing problem, make a two-column buyer and seller ledger so a credit to one party becomes the corresponding debit to the other when the facts require it. For a percentage problem, identify the whole before choosing the base. After calculating, reverse the formula whenever possible: multiply value by cap rate to recover NOI, multiply value by LTV to recover the loan, or add seller debits back to net to recover sale price. Record misses by cause, not merely topic. A formula miss calls for retrieval practice, a direction miss calls for party labeling, a day-count miss calls for a timeline, and a calculator miss calls for slower entry and estimation. This makes every error useful instead of allowing the same mistake to return in a different story problem.

Official section: National XI: Real Estate Math
Broker weight: Approximately 7 of 100 scored national questions
Expected scored items: The current PSI broker outline assigns about 7% of the national portion to Real Estate Math

Real Estate Calculations Practice: Illinois Exam Guide exam weight
Official section	Broker weight	Expected scored items
National XI: Real Estate Math	Approximately 7 of 100 scored national questions	The current PSI broker outline assigns about 7% of the national portion to Real Estate Math

The current outline names seller net, buyer funds, prorations, transfer fees, PITI, equity, capitalization or rate of return, LTV, points, and origination fees. Commission can be an input to seller net or compensation arithmetic, but commission splits are not a standalone current national math family. Buyer qualification ratios support Financing rather than a named Real Estate Math subheading. Proration customs, transfer taxes, assessment systems, and closing allocations vary by jurisdiction and contract. Use the exact facts and stated convention. Sources were checked through August 1, 2026.

Ready to work the set?

These questions are original study items aligned to the published outline. They are not copied, recalled, or predicted PSI questions.

1. A property sells for $300,000. The seller pays off a $170,000 mortgage, pays a 5% commission, and has $5,000 in other seller debits. What is the seller's net before any other items?

$110,000
$115,000
$120,000
$130,000

Show answer and explanation

Answer: $110,000

The commission is $15,000. Subtract $170,000, $15,000, and $5,000 from $300,000 to get $110,000.

2. Monthly principal and interest are $1,500, annual taxes are $4,800, and annual homeowner's insurance is $1,200. What is monthly PITI?

$1,600
$1,900
$2,000
$2,100

Show answer and explanation

Answer: $2,000

Monthly taxes are $400 and monthly insurance is $100. Add both to $1,500 principal and interest for $2,000.

3. A property has annual NOI of $42,000 and a value of $600,000. What is the capitalization rate?

6%
7%
8%
14.29%

Show answer and explanation

Answer: 7%

$42,000 divided by $600,000 equals 0.07, or 7%.

4. A $255,000 loan uses the $300,000 value base specified in the problem. What is the LTV?

Show answer and explanation

Answer: 85%

$255,000 divided by $300,000 equals 0.85, or 85%.

5. A borrower pays 1.5 points on a $240,000 loan. What is the dollar cost of the points?

$2,400
$3,600
$4,800
$6,000

Show answer and explanation

Answer: $3,600

Multiply the $240,000 loan amount by 0.015 to get $3,600.

Which answer habits should you watch for?

Trap: Every number in the question must enter the formula.
Correction: Some figures are distractors. Use only facts tied to the requested result.

Trap: Five percent means multiply by 5.
Correction: Convert 5% to 0.05 before multiplying.

Trap: Seller net and equity are the same.
Correction: Equity ignores many sale costs. Seller net includes the relevant closing debits and credits.

Trap: Down payment equals total cash to close.
Correction: Cash to close also includes buyer costs and prepaids, less deposits and credits.

Trap: Every proration uses 360 days.
Correction: Use the stated convention, which may be 360, 365, or actual calendar days.

Trap: A proration amount identifies the debit automatically.
Correction: Determine whether the item is paid in advance or arrears and which party owns each period.

Trap: PITI includes every recurring housing charge.
Correction: PITI contains only principal, interest, taxes, and insurance unless the question asks for a broader total.

Trap: Cap rate uses gross income.
Correction: Cap rate uses annual NOI divided by value.

Trap: Debt service is an operating expense in NOI.
Correction: Standard exam NOI is calculated before mortgage debt service.

Trap: LTV puts property value in the numerator.
Correction: LTV equals loan divided by the required value base.

Trap: Points are a percentage of purchase price.
Correction: Points are calculated from the loan amount unless the problem expressly defines another base.

Trap: Commission splits are a standalone current math family.
Correction: Commission can be supporting arithmetic, but the current national Real Estate Math headings emphasize the published families listed here.

Real Estate Calculations Practice: Illinois Exam Guide trap corrections
Trap	Correction
Every number in the question must enter the formula.	Some figures are distractors. Use only facts tied to the requested result.
Five percent means multiply by 5.	Convert 5% to 0.05 before multiplying.
Seller net and equity are the same.	Equity ignores many sale costs. Seller net includes the relevant closing debits and credits.
Down payment equals total cash to close.	Cash to close also includes buyer costs and prepaids, less deposits and credits.
Every proration uses 360 days.	Use the stated convention, which may be 360, 365, or actual calendar days.
A proration amount identifies the debit automatically.	Determine whether the item is paid in advance or arrears and which party owns each period.
PITI includes every recurring housing charge.	PITI contains only principal, interest, taxes, and insurance unless the question asks for a broader total.
Cap rate uses gross income.	Cap rate uses annual NOI divided by value.
Debt service is an operating expense in NOI.	Standard exam NOI is calculated before mortgage debt service.
LTV puts property value in the numerator.	LTV equals loan divided by the required value base.
Points are a percentage of purchase price.	Points are calculated from the loan amount unless the problem expressly defines another base.
Commission splits are a standalone current math family.	Commission can be supporting arithmetic, but the current national Real Estate Math headings emphasize the published families listed here.

How should you reason through a difficult item?

Seller net with a payoff

Scenario: A property sells for $310,000. The seller owes a $184,000 mortgage payoff, a 5% commission, and $4,300 in other seller costs. Ignore every other item.

The 5% commission is $310,000 multiplied by 0.05, or $15,500.
Total seller debits are $184,000 plus $15,500 plus $4,300, or $203,800.
$310,000 minus $203,800 equals $106,200.

Answer: The seller's estimated net is $106,200.

Buyer funds after earnest money

Scenario: The price is $360,000 and the loan is $288,000. Buyer closing costs are $7,200, and $6,000 earnest money is credited at closing. Ignore other items.

The down payment is $360,000 minus $288,000, or $72,000.
Add the $7,200 buyer costs to reach $79,200.
Subtract the $6,000 earnest-money credit to reach $73,200.

Answer: The buyer needs $73,200 under the stated facts.

PITI needs matching time periods

Scenario: Monthly principal and interest are $1,640. Annual property taxes are $5,400 and annual homeowner's insurance is $1,440. Ignore other charges.

$5,400 divided by 12 gives $450 monthly taxes.
$1,440 divided by 12 gives $120 monthly insurance.
$1,640 plus $450 plus $120 equals $2,210.

Answer: Monthly PITI is $2,210.

Cap rate uses NOI

Scenario: A property produces $48,600 in annual NOI and sells for $540,000. What is the capitalization rate?

The numerator is annual NOI, already supplied as $48,600.
Divide $48,600 by $540,000 to get 0.09.
Convert 0.09 to 9%.

Answer: The capitalization rate is 9%.

LTV keeps the loan on top

Scenario: A buyer obtains a $306,000 loan on a property with the $360,000 value base specified by the question.

LTV equals loan amount divided by the required value base.
$306,000 divided by $360,000 equals 0.85.
Convert the decimal to 85%.

Answer: The LTV is 85%.

Points use the loan amount

Scenario: A $280,000 loan carries 2.5 discount points. Ignore every other charge.

One point equals one percent of the loan amount.
Convert 2.5% to 0.025.
$280,000 multiplied by 0.025 equals $7,000.

Answer: The discount points cost $7,000.

How should you answer a real estate calculation question?

Write the requested result in words and units before copying any number.
List the supplied facts and cross out narrative details that do not enter the formula.
Normalize dollars, percentages, annual amounts, monthly amounts, and day conventions.
Write one formula with labels, then insert values only after the relationship is correct.
Estimate whether the answer should be larger, smaller, positive, negative, or near a familiar benchmark.
Calculate carefully and delay rounding until the final step unless the question says otherwise.
Check the result by reversing the formula, adding the closing columns, or comparing against the estimate.
Choose the option only after verifying party, base, time period, units, and debit-credit direction.

Target: Seller net
Core setup: Seller credits minus seller debits
Common wrong base: Ignoring payoff or subtracting a debit twice

Target: Buyer funds
Core setup: Down payment plus buyer charges minus deposits and credits
Common wrong base: Using loan amount as cash required

Target: Daily proration
Core setup: Periodic amount divided by stated days, then times responsible days
Common wrong base: Using 360 when the problem says calendar days

Target: Transfer fee
Core setup: Taxable units times fee per unit
Common wrong base: Ignoring the stated bracket or round-up rule

Target: PITI
Core setup: Monthly P and I plus monthly taxes plus monthly insurance
Common wrong base: Adding annual taxes directly to a monthly payment

Target: Equity
Core setup: Current value minus relevant debt
Common wrong base: Using original purchase price automatically

Target: Cap rate
Core setup: Annual NOI divided by value
Common wrong base: Using gross income or subtracting debt service

Target: Value by cap
Core setup: Annual NOI divided by cap rate
Common wrong base: Multiplying NOI by cap rate

Target: LTV
Core setup: Loan amount divided by required value base
Common wrong base: Putting value in the numerator

Target: Points or fee
Core setup: Loan amount times stated percent
Common wrong base: Using purchase price instead of loan amount

Current real estate math formula table
Target	Core setup	Common wrong base
Seller net	Seller credits minus seller debits	Ignoring payoff or subtracting a debit twice
Buyer funds	Down payment plus buyer charges minus deposits and credits	Using loan amount as cash required
Daily proration	Periodic amount divided by stated days, then times responsible days	Using 360 when the problem says calendar days
Transfer fee	Taxable units times fee per unit	Ignoring the stated bracket or round-up rule
PITI	Monthly P and I plus monthly taxes plus monthly insurance	Adding annual taxes directly to a monthly payment
Equity	Current value minus relevant debt	Using original purchase price automatically
Cap rate	Annual NOI divided by value	Using gross income or subtracting debt service
Value by cap	Annual NOI divided by cap rate	Multiplying NOI by cap rate
LTV	Loan amount divided by required value base	Putting value in the numerator
Points or fee	Loan amount times stated percent	Using purchase price instead of loan amount

Which outline areas does this set sample?

Topic: Seller net
What to know: Sale price, mortgage payoff, lien payoff, commission, seller closing cost, transfer fee, tax proration, repair credit, concession, other debit, seller credit, and proceeds
Best exam move: Start with the seller's credits, subtract every seller debit once, and keep buyer cash out of the calculation.

Topic: Buyer funds needed at closing
What to know: Purchase price, loan amount, down payment, earnest money, deposit, buyer closing cost, prepaid item, tax or rent proration, lender credit, seller credit, and cash to close
Best exam move: Find down payment from price minus loan, add buyer charges, then subtract deposits and credits already applied.

Topic: Prorations
What to know: Property tax, rent, interest, association dues, annual amount, monthly amount, 360-day convention, 365-day convention, calendar day, closing day, advance, arrears, ownership period, debit, and credit
Best exam move: Choose the period and day ownership first, then determine which party owes the other before multiplying.

Topic: Real estate transfer fees
What to know: Taxable consideration, statutory rate, unit or bracket, state tax, county tax, municipal tax, exemption, declaration, seller responsibility, buyer responsibility, and local variation
Best exam move: Divide by the stated unit, apply any round-up rule, multiply by the rate, and keep separate government layers separate.

Topic: PITI
What to know: Principal, interest, property taxes, homeowner's insurance, annual-to-monthly conversion, mortgage insurance distinction, association dues distinction, escrow payment, and total housing payment
Best exam move: Use only P, I, T, and I unless the question explicitly asks for a broader monthly housing cost.

Topic: Equity
What to know: Market value, property value, mortgage balance, junior lien, debt secured by property, owner interest, appreciation, principal reduction, negative equity, and sale proceeds distinction
Best exam move: Subtract relevant secured debt from current value and do not confuse equity with cash invested or seller net.

Topic: Rate of return and capitalization rate
What to know: Gross income, vacancy, effective gross income, operating expense, net operating income, value, price, cap rate, annual period, debt service exclusion, depreciation exclusion, and inverse formula
Best exam move: Use annual NOI divided by value for cap rate and rearrange the same relationship when value or NOI is unknown.

Topic: Loan-to-value ratio
What to know: Loan amount, value base, purchase price, appraised value, lesser-of rule when stated, first mortgage, combined LTV distinction, percentage, down payment, and financing risk
Best exam move: Put the loan in the numerator and the question's required value base in the denominator.

Topic: Discount points and origination fees
What to know: Loan amount, point, one percent, discount point, interest-rate pricing, origination fee, borrower charge, lender credit, percentage-to-decimal conversion, dollar amount, and no purchase-price base
Best exam move: Multiply the loan amount, not the sale price, by the stated percentage unless the question expressly defines another base.

Real Estate Calculations Practice: Illinois Exam Guide complete outline
Topic	What to know	Best exam move
Seller net	Sale price, mortgage payoff, lien payoff, commission, seller closing cost, transfer fee, tax proration, repair credit, concession, other debit, seller credit, and proceeds	Start with the seller's credits, subtract every seller debit once, and keep buyer cash out of the calculation.
Buyer funds needed at closing	Purchase price, loan amount, down payment, earnest money, deposit, buyer closing cost, prepaid item, tax or rent proration, lender credit, seller credit, and cash to close	Find down payment from price minus loan, add buyer charges, then subtract deposits and credits already applied.
Prorations	Property tax, rent, interest, association dues, annual amount, monthly amount, 360-day convention, 365-day convention, calendar day, closing day, advance, arrears, ownership period, debit, and credit	Choose the period and day ownership first, then determine which party owes the other before multiplying.
Real estate transfer fees	Taxable consideration, statutory rate, unit or bracket, state tax, county tax, municipal tax, exemption, declaration, seller responsibility, buyer responsibility, and local variation	Divide by the stated unit, apply any round-up rule, multiply by the rate, and keep separate government layers separate.
PITI	Principal, interest, property taxes, homeowner's insurance, annual-to-monthly conversion, mortgage insurance distinction, association dues distinction, escrow payment, and total housing payment	Use only P, I, T, and I unless the question explicitly asks for a broader monthly housing cost.
Equity	Market value, property value, mortgage balance, junior lien, debt secured by property, owner interest, appreciation, principal reduction, negative equity, and sale proceeds distinction	Subtract relevant secured debt from current value and do not confuse equity with cash invested or seller net.
Rate of return and capitalization rate	Gross income, vacancy, effective gross income, operating expense, net operating income, value, price, cap rate, annual period, debt service exclusion, depreciation exclusion, and inverse formula	Use annual NOI divided by value for cap rate and rearrange the same relationship when value or NOI is unknown.
Loan-to-value ratio	Loan amount, value base, purchase price, appraised value, lesser-of rule when stated, first mortgage, combined LTV distinction, percentage, down payment, and financing risk	Put the loan in the numerator and the question's required value base in the denominator.
Discount points and origination fees	Loan amount, point, one percent, discount point, interest-rate pricing, origination fee, borrower charge, lender credit, percentage-to-decimal conversion, dollar amount, and no purchase-price base	Multiply the loan amount, not the sale price, by the stated percentage unless the question expressly defines another base.

What should you sort out before you begin?

Terms: Sale price vs. seller net
Difference: Sale price is the gross contract amount. Seller net is the amount remaining after seller debits and applicable credits.
Question cue: Top-line contract number versus proceeds after payoff and costs.

Terms: Down payment vs. cash to close
Difference: Down payment is price minus financed amount. Cash to close also reflects closing charges, prepaids, deposits, and credits.
Question cue: Equity contribution alone versus total buyer funds due after adjustments.

Terms: Debit vs. credit
Difference: A debit is an amount charged to a party. A credit is an amount added for a party or applied against what that party owes.
Question cue: Who owes the adjustment versus who receives its benefit.

Terms: Paid in advance vs. paid in arrears
Difference: An advance payment can require reimbursement to the party who paid for the other party's period. An arrears item can require charging the party who used the benefit before it is paid.
Question cue: Prepaid future period versus accrued unpaid past period.

Terms: PITI vs. total monthly housing cost
Difference: PITI includes principal, interest, taxes, and insurance. A broader housing cost may add mortgage insurance, association dues, ground rent, or other charges.
Question cue: Use four named components unless the question asks for more.

Terms: Equity vs. seller proceeds
Difference: Equity is value minus relevant debt. Seller proceeds also reflect selling costs, credits, taxes, and other closing debits.
Question cue: Ownership value before sale costs versus cash after closing adjustments.

Terms: Gross income vs. NOI
Difference: Gross income is revenue before deductions. NOI is effective gross income minus operating expenses before debt service and other excluded items.
Question cue: Cap rate uses NOI, not gross scheduled income or cash flow after mortgage payments.

Terms: Cap rate vs. GRM
Difference: Cap rate uses annual NOI and value. GRM compares price with gross rent and does not directly deduct operating expenses.
Question cue: Net income percentage versus gross-rent multiplier.

Terms: LTV vs. down-payment percentage
Difference: LTV is loan divided by value base. Down-payment percentage is buyer equity contribution divided by price under the stated facts.
Question cue: They can complement each other in a simple purchase but are not always perfect inverses.

Terms: Points vs. percent of sale price
Difference: One point is one percent of the loan amount. It is not one percent of the purchase price unless the loan and price happen to be equal.
Question cue: Find the loan base before multiplying.

Real Estate Calculations Practice: Illinois Exam Guide tested distinctions
Terms	Difference	Question cue
Sale price vs. seller net	Sale price is the gross contract amount. Seller net is the amount remaining after seller debits and applicable credits.	Top-line contract number versus proceeds after payoff and costs.
Down payment vs. cash to close	Down payment is price minus financed amount. Cash to close also reflects closing charges, prepaids, deposits, and credits.	Equity contribution alone versus total buyer funds due after adjustments.
Debit vs. credit	A debit is an amount charged to a party. A credit is an amount added for a party or applied against what that party owes.	Who owes the adjustment versus who receives its benefit.
Paid in advance vs. paid in arrears	An advance payment can require reimbursement to the party who paid for the other party's period. An arrears item can require charging the party who used the benefit before it is paid.	Prepaid future period versus accrued unpaid past period.
PITI vs. total monthly housing cost	PITI includes principal, interest, taxes, and insurance. A broader housing cost may add mortgage insurance, association dues, ground rent, or other charges.	Use four named components unless the question asks for more.
Equity vs. seller proceeds	Equity is value minus relevant debt. Seller proceeds also reflect selling costs, credits, taxes, and other closing debits.	Ownership value before sale costs versus cash after closing adjustments.
Gross income vs. NOI	Gross income is revenue before deductions. NOI is effective gross income minus operating expenses before debt service and other excluded items.	Cap rate uses NOI, not gross scheduled income or cash flow after mortgage payments.
Cap rate vs. GRM	Cap rate uses annual NOI and value. GRM compares price with gross rent and does not directly deduct operating expenses.	Net income percentage versus gross-rent multiplier.
LTV vs. down-payment percentage	LTV is loan divided by value base. Down-payment percentage is buyer equity contribution divided by price under the stated facts.	They can complement each other in a simple purchase but are not always perfect inverses.
Points vs. percent of sale price	One point is one percent of the loan amount. It is not one percent of the purchase price unless the loan and price happen to be equal.	Find the loan base before multiplying.

How should you review your results?

Session: 1. Build the setup habit
Focus: Target, facts, units, formula, estimate, calculation, rounding, and verification
Proof you are ready: Write complete labeled setups for ten problems before using a calculator.

Session: 2. Close from both sides
Focus: Seller credits and debits, buyer down payment, closing costs, deposits, credits, payoff, and proceeds
Proof you are ready: Calculate seller net and buyer funds from the same transaction without mixing parties.

Session: 3. Master prorations and fees
Focus: Advance, arrears, day convention, closing day, debit, credit, transfer-tax unit, rate, and round-up rule
Proof you are ready: Solve one 360-day, one 365-day, and one calendar-day proration with a stated convention.

Session: 4. Practice monthly housing math
Focus: PITI, annual-to-monthly conversion, mortgage insurance distinction, points, origination fees, and loan base
Proof you are ready: Calculate five PITI totals and five loan charges without using purchase price as the wrong base.

Session: 5. Connect value and financing
Focus: Equity, value, debt, NOI, cap rate, value by capitalization, LTV, and down payment
Proof you are ready: Rearrange each three-part formula and reverse-check every answer.

Session: 6. Use timed mixed drills
Focus: Reading precision, distractors, estimation, arithmetic, rounding, formula choice, and error log
Proof you are ready: Score at least 9 of 10 on two fresh randomized sets and explain each setup aloud.

Real Estate Calculations Practice: Illinois Exam Guide focused study plan
Session	Focus	Proof you are ready
1. Build the setup habit	Target, facts, units, formula, estimate, calculation, rounding, and verification	Write complete labeled setups for ten problems before using a calculator.
2. Close from both sides	Seller credits and debits, buyer down payment, closing costs, deposits, credits, payoff, and proceeds	Calculate seller net and buyer funds from the same transaction without mixing parties.
3. Master prorations and fees	Advance, arrears, day convention, closing day, debit, credit, transfer-tax unit, rate, and round-up rule	Solve one 360-day, one 365-day, and one calendar-day proration with a stated convention.
4. Practice monthly housing math	PITI, annual-to-monthly conversion, mortgage insurance distinction, points, origination fees, and loan base	Calculate five PITI totals and five loan charges without using purchase price as the wrong base.
5. Connect value and financing	Equity, value, debt, NOI, cap rate, value by capitalization, LTV, and down payment	Rearrange each three-part formula and reverse-check every answer.
6. Use timed mixed drills	Reading precision, distractors, estimation, arithmetic, rounding, formula choice, and error log	Score at least 9 of 10 on two fresh randomized sets and explain each setup aloud.

Do not count recognition as mastery. Close the notes and explain the rule, apply it to a new fact pattern, and identify why each distractor fails.

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Questions students ask about Real Estate Calculations Practice: Illinois Exam Guide

How much math is on the national real estate exam?

The PSI broker outline effective June 24, 2026 assigns approximately 7 of the 100 scored national questions to Real Estate Math. Math also supports financing, valuation, property ownership, closings, and Illinois transfer-tax questions, so its practical reach is wider than seven isolated items.

What calculations are named in the current broker outline?

The current outline names seller net, buyer funds needed at closing, property-tax and other prorations, real estate transfer fees, PITI, equity, rate of return or capitalization rate, loan-to-value ratio, discount points, and loan origination fees.

Are commission splits a standalone current math heading?

No. Commission may appear as a seller cost, contract term, compensation fact, or supporting arithmetic, but commission splits are not a standalone calculation family in the current national Real Estate Math section. Prioritize the published headings instead of relying on an older topic list.

Are buyer qualification ratios still useful?

Yes, as a financing support skill. Housing and total-debt ratios can appear in underwriting context, but the current Real Estate Math subheadings do not list buyer qualification ratios as their own named calculation family.

What is the best way to set up a real estate math problem?

Write what the question asks for, list only the supplied facts, convert rates to decimals, choose one formula, label dollars or percentages, estimate the direction of the result, calculate, and then test the answer against the facts. Do not start pressing calculator keys before the relationship is clear.

What does PITI include?

PITI means principal, interest, taxes, and insurance. On an exam question, principal and interest may arrive as one monthly payment while annual property taxes and annual insurance must be converted to monthly amounts before addition.

How do I calculate capitalization rate?

Capitalization rate equals annual net operating income divided by property value or price. Keep debt service, depreciation, and income taxes out of NOI unless the question's definition expressly says otherwise. Always match the income period to the value date.

How do I handle proration conventions?

Use the convention stated in the problem: 360-day year, 365-day year, actual calendar days, paid in advance or arrears, and whether the closing day belongs to buyer or seller. The arithmetic cannot rescue the wrong day count or debit-credit direction.

What practice score should I target for exam math?

Aim for at least 90% on fresh ten-question sets because arithmetic errors are preventable. Require the correct formula, units, direction, and reasonableness check, not merely the matching option. Use the site's randomized math drill until you can sustain that result.

Are these official PSI calculation questions?

No. They are original practice examples mapped to the published broker outline. They are not copied or recalled live exam items. The PSI booklet and primary Illinois tax, federal consumer-finance, and mortgage sources were checked through August 1, 2026.

Primary sources

The current official outline controls the tested scope. Statutes, regulations, and official agency materials control when a general study rule and a jurisdiction-specific rule differ.

Editorial status

Checked against primary sources

The Pass Illinois editorial team last checked this guide on August 1, 2026. Every practice question is an original study item, and the source links above let you verify the rules that support the lesson.

Read our editorial and corrections process

Set up the relationship before touching the calculator

What skill does this practice set measure?

Ready to work the set?

1. A property sells for $300,000. The seller pays off a $170,000 mortgage, pays a 5% commission, and has $5,000 in other seller debits. What is the seller's net before any other items?

2. Monthly principal and interest are $1,500, annual taxes are $4,800, and annual homeowner's insurance is $1,200. What is monthly PITI?

3. A property has annual NOI of $42,000 and a value of $600,000. What is the capitalization rate?

4. A $255,000 loan uses the $300,000 value base specified in the problem. What is the LTV?

5. A borrower pays 1.5 points on a $240,000 loan. What is the dollar cost of the points?

Which answer habits should you watch for?

How should you reason through a difficult item?

Seller net with a payoff

Buyer funds after earnest money

PITI needs matching time periods

Cap rate uses NOI

LTV keeps the loan on top

Points use the loan amount

How should you answer a real estate calculation question?

Which outline areas does this set sample?

What should you sort out before you begin?

How should you review your results?

Continue the feedback loop in Pass Illinois

Drill this topic, then review the explanation

What should you study next?

Questions students ask about Real Estate Calculations Practice: Illinois Exam Guide

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