Where this fits on the exam
| Official syllabus topic | XI Real Estate Calculations: formula selection and rearrangement across transaction and general concepts |
|---|---|
| Official PSI area | Real Estate Calculations |
| Published weight | 7% of the national portion |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
The Rule
PSI publishes a weight for the complete official area, not a guaranteed count for this individual calculation. Follow the stated facts, units, time basis, and rounding instruction.
Formula and variables
| Symbol or term | Meaning |
|---|---|
| Part | The dollar amount or quantity produced by applying a rate to a base |
| Total | The whole or base to which the rate applies |
| Rate | The percentage or ratio converted to a decimal when multiplying or dividing |
Step-by-step method
- Translate the problem into words: what is the part, what is the total base, and what is the rate?
- Place the part above the T-bar and total and rate below it.
- Cover the unknown term to reveal multiplication or division.
- Convert a percentage to a decimal before calculating.
- Check that the chosen base matches the legal or financial rule, because the diagram cannot catch a wrong base.
Georgia-specific distinction
Worked examples
Example 1: Find commission rate
Scenario. A total commission is $18,900 on a $315,000 sale.
- Part = $18,900 commission; total = $315,000 sale price; rate is unknown.
- Rate = part / total = $18,900 / $315,000 = 0.06.
- 0.06 = 6%.
Answer. The stated commission rate is 6%.
Reasonableness check. $315,000 x 6% returns $18,900. Commission rates are negotiable; this is only the rate in the scenario.
Example 2: Find property value from LTV
Scenario. A $288,000 loan represents 80% LTV.
- Part = $288,000 loan; rate = 0.80; total value is unknown.
- Value = $288,000 / 0.80 = $360,000.
Answer. The value is $360,000.
Reasonableness check. Eighty percent of $360,000 is the $288,000 loan.
Common exam traps
- Putting the percentage above the bar as though it were the part
- Using the first large number in the stem as the total without identifying its role
- Entering 8 instead of 0.08
- Using a simple T-bar for a stepped tax with statutory rounding
Original practice questions with detailed explanations
These original instructional questions map to the July 1, 2026 PSI outline. They are not copied from PSI or any live examination. Write the setup before opening the explanation.
Question 1A seller wants to net $285,000 after paying a 5% commission on the sale price. Ignoring other costs, what is the lowest price that works?
- A. $270,750
- B. $299,250
- C. $300,000
- D. $5,700,000
Show answer and explanation →
Answer: C. $300,000
The net is the part and the seller keeps 95% of the price, so price = $285,000 / 0.95 = $300,000. $299,250 adds 5% of the net, but the commission is 5% of the larger sale price. $270,750 takes 5% off the net.
- A. Incorrect. $270,750 subtracts 5% from the desired net rather than finding a price that yields it.
- B. Incorrect. $299,250 adds 5% of the net, but the commission is measured on the larger sale price.
- C. Correct. The seller keeps 95% of price; $285,000 divided by 0.95 equals $300,000.
- D. Incorrect. $5,700,000 divides the desired net by the commission's 5% instead of the retained 95%.
Question 2A lender charges $14,400 of interest in the first year on a $240,000 loan balance. What annual interest rate does that represent?
- A. 0.6%
- B. 6.0%
- C. 16.7%
- D. 60.0%
Show answer and explanation →
Answer: B. 6.0%
Rate = interest / principal = $14,400 / $240,000 = 0.06, or 6%. Reversing the division produces a quotient of about 16.7, not a valid 16.7% interest rate. The 0.6% and 60% choices misplace the decimal when converting 0.06 to a percentage. Check the answer by multiplying $240,000 by 6% to recover $14,400.
- A. Incorrect. 0.6% is one-tenth of the interest-to-principal ratio expressed as a percentage.
- B. Correct. $14,400 divided by $240,000 is 0.06, or 6%.
- C. Incorrect. 16.7% does not satisfy the interest-to-principal formula; it would imply roughly $40,080 annual interest.
- D. Incorrect. 60% is ten times the correct rate and would imply $144,000 annual interest.
Question 3A candidate estimates Georgia transfer tax on $250,050 of taxable consideration as 0.1% of the price. What is the correct statutory tax?
- A. $250.00
- B. $250.05
- C. $250.10
- D. $2,500.50
Show answer and explanation →
Answer: C. $250.10
The tax is $1 for the first $1,000 plus $0.10 per additional $100 or fraction: $249,050 is 2,490.5 units, which rounds up to 2,491, for $1 + $249.10 = $250.10. $250.05 is the flat 0.1% shortcut, which misses the round-up. A simple T-bar cannot handle a stepped tax with statutory rounding.
- A. Incorrect. $250 drops the remaining fractional $100 unit from the tax count.
- B. Incorrect. $250.05 is the flat 0.1% estimate before statutory round-up.
- C. Correct. The $249,050 remainder requires 2,491 units; $1 plus $249.10 equals $250.10.
- D. Incorrect. $2,500.50 uses 1% of consideration, ten times the approximate rate and without statutory units.
Ready to move on?
You have this calculation down when all of these are true.
- I can label part, total, and rate before drawing the T-bar.
- I cover the unknown and choose multiplication or division correctly.
- I convert percentages to decimals.
- I can apply the relationship to commission, LTV, cap rate, and assessment.
- I know when a statutory stepped formula needs more than the T-bar.
Recommended next lesson
Continue with How to Read a Real Estate Math Word Problem. The T-bar only works after you have picked the right base, and the next lesson teaches that sorting step: read the final sentence first and set aside the decoy numbers.
Return to the complete calculation hub, formula sheet, or mixed math drill.