California Real Estate Practice Exam

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Study for the California Real Estate Exam with confidence. Engage with interactive questions designed to enhance your understanding of real estate principles, laws, and practices. Prepare thoroughly for your licensing test and ensure you have the knowledge to succeed in your real estate career!

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How much profit does Buyer A make if his house appreciates 25% after purchasing it for $300,000?

$75,000
$60,000
$50,000
$100,000

The correct answer is: $75,000

When a house appreciates by 25%, it means its value has increased by 25%. If Buyer A purchased the house for $300,000, a 25% increase would mean the value of the house is now $300,000 + (0.25 * $300,000) = $375,000. Therefore, the profit made by Buyer A would be $375,000 - $300,000 = $75,000. The other options are incorrect because - Option B ($60,000) is not the correct profit as it only reflects a 20% increase instead of 25%. - Option C ($50,000) is not the correct profit as it only reflects a 16.67% increase instead of 25%. - Option D ($100,000) is not the correct profit as it only reflects a 33.33%