California Real Estate Practice Exam

An investor purchased a property for 10% less than the listed price, then resold it for the previously listed price. What was the percentage profit?

1. 9%

2. 10%

3. 11%

4. 12%

The correct answer is: 9%

To determine the percentage profit from the investment, we first need to establish the purchase and resale values based on the information given. Let's assume the listed price of the property is $100. The investor purchased it for 10% less than the listed price, which means they bought the property for $90. When the investor resold the property for the previously listed price, they sold it for $100. The profit made from the resale can be calculated as follows: - Profit = Sale Price - Purchase Price = $100 - $90 = $10. Next, to find the percentage profit, we use the formula: - Percentage Profit = (Profit / Purchase Price) x 100. Substituting in the values: - Percentage Profit = ($10 / $90) x 100 ≈ 11.11%. Thus, the percentage profit is approximately 11.11%, which indicates a more accurate calculation leads to an 11% profit, suggesting that the correct choice should reflect this understanding better. This process showcases how analyzing the profit based on the investment's purchase price is crucial in determining the actual returns on the investment made by the investor. The correct answer aligns with this method of calculation, reflecting the relationship between the purchase and