California Real Estate Practice Exam

Question: 1 / 585

If a $52,500 loan was made on a property which was equivalent to 70% of the appraised value, what was the amount of the appraised value?

$50,000

$75,000

To determine the appraised value of the property based on the loan amount and the percentage of the appraised value that the loan represents, you can use the formula:

Loan Amount = Percentage × Appraised Value

In this case, the loan amount is $52,500 and it represents 70% of the appraised value. We can rearrange the formula to find the appraised value:

Appraised Value = Loan Amount / Percentage

Substituting the given values:

Appraised Value = $52,500 / 0.70

Calculating that gives:

Appraised Value = $75,000

Thus, the appraised value of the property is $75,000, which corresponds to the correct answer. The understanding of how loan-to-value ratios work is crucial in real estate, as it informs individuals about the amount they can borrow in relation to the property's value.

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$80,000

$90,000

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