math

percentage

A percentage expresses a part of a whole as a fraction of 100. In real estate math, percentages appear in commissions, interest rates, down payments, loan-to-value ratios, tax rates, and appreciation. Most problems use the formula Part equals Whole times Rate, rearranged to solve for the missing value. Convert a percentage to a decimal by moving the decimal point two places left.

Exam tip: Use the T-bar: Part on top, Whole times Rate on the bottom. Many errors come from forgetting to convert percentages to decimals, such as 6 percent to 0.06.
Example: A 6 percent commission on a $350,000 sale equals $350,000 x 0.06, or $21,000.

1. Under federal rules, a lender must automatically cancel borrower-paid PMI when the loan balance reaches what percentage of the original value (purchase price)?

Answer & explanation

Answer: A. PMI terminates automatically at 78% LTV based on original value. At 80% LTV the borrower may REQUEST cancellation, which is the tempting distractor.

Related terms & state variants

appreciation rate commission split loan-to-value ratio rate of return

Sources

Source verification pending. Confirm current requirements with your state regulator.

Last verified: 2026-10-23