NY Real Estate Exam Math: Formulas and Practice Problems
Math questions appear on the NY real estate licensing exam. Not many — typically 5 to 10 questions out of 75 — but they require a different kind of preparation than the law and vocabulary questions. You need to know the formulas, apply them correctly, and manage the calculation under time pressure.
This guide covers the five math topics that appear most frequently and walks through a practice problem for each.
Commission Calculations
Commission is the most common math topic on the exam. The core formula is simple:
Commission = Sale Price × Commission Rate
Most problems add a second step: splitting the commission between brokers and then between broker and agent.
Practice Problem:
A property sells for $520,000. The total commission is 6%, split equally between the listing broker and the buyer’s broker. Each agent receives 55% of their broker’s share. How much does the listing agent earn?
Step 1 — Total commission: $520,000 × 0.06 = $31,200<br />Step 2 — Listing broker’s share: $31,200 ÷ 2 = $15,600<br />Step 3 — Listing agent’s share: $15,600 × 0.55 = $8,580
Watch for problems that give you the commission amount and ask for the sale price or rate. Rearrange the formula: Sale Price = Commission ÷ Rate.
Area and Square Footage
Area questions usually involve rectangular lots or rooms. The formula:
Area = Length × Width
For triangular areas: Area = ½ × Base × Height
Exam questions often require unit conversion. Know that:
- 1 acre = 43,560 square feet
- 1 square yard = 9 square feet
Practice Problem:
A rectangular lot is 150 feet wide and 200 feet deep. What is the lot size in acres?
Step 1 — Area in square feet: 150 × 200 = 30,000 sq ft<br />Step 2 — Convert to acres: 30,000 ÷ 43,560 = 0.689 acres
Some problems give you the price per square foot and ask for total value. Multiply area by price per square foot.
Proration
Proration problems appear regularly and trip up many test-takers. Proration means dividing a cost — usually property taxes, insurance, or rent — between buyer and seller based on the closing date.
The standard method used on the NY exam is the 30-day month / 360-day year (banker’s year) method:
Daily rate = Annual amount ÷ 360<br />Monthly rate = Annual amount ÷ 12
Practice Problem:
Annual property taxes are $4,800. The closing date is March 15. The seller is responsible for taxes through the day of closing. How much does the seller owe in prorated taxes?
Step 1 — Daily rate: $4,800 ÷ 360 = $13.33/day<br />Step 2 — Days seller owes: January (30) + February (30) + 15 days of March = 75 days<br />Step 3 — Seller’s share: 75 × $13.33 = $999.75
The buyer receives a credit at closing for the seller’s unpaid taxes.
Mortgage Calculations
Mortgage math on the exam typically covers two areas: loan amount calculations and monthly payment interest.
Loan Amount:<br />Most mortgages are expressed as a percentage of the purchase price (loan-to-value ratio).
Loan Amount = Purchase Price × LTV Ratio<br />Down Payment = Purchase Price × (1 − LTV Ratio)
Monthly Interest:<br />Monthly Interest = Loan Balance × (Annual Rate ÷ 12)
Practice Problem:
A buyer purchases a home for $380,000 with an 80% LTV conventional mortgage at 7% annual interest. What is the interest portion of the first monthly payment?
Step 1 — Loan amount: $380,000 × 0.80 = $304,000<br />Step 2 — Monthly interest: $304,000 × (0.07 ÷ 12) = $304,000 × 0.005833 = $1,773.33
Property Tax Calculations
Tax questions involve assessed value, mill rates, and exemptions.
Key terms:
- Assessed value — the value assigned by the assessor (often a percentage of market value)
- Mill rate — property tax expressed as dollars per $1,000 of assessed value
- Equalization rate — the ratio of assessed value to market value
Tax Formula:<br />Annual Tax = (Assessed Value ÷ 1,000) × Mill Rate
Practice Problem:
A property has a market value of $400,000. The equalization rate is 80%. The mill rate is 22 mills. What are the annual property taxes?
Step 1 — Assessed value: $400,000 × 0.80 = $320,000<br />Step 2 — Annual tax: ($320,000 ÷ 1,000) × 22 = 320 × 22 = $7,040
Appreciation and Depreciation
Appreciated Value = Original Value × (1 + Rate)<br />Depreciated Value = Original Value × (1 − Rate)
Practice Problem:
A property was purchased for $260,000 and appreciated 4% per year for two years. What is the current value?
Step 1 — After year 1: $260,000 × 1.04 = $270,400<br />Step 2 — After year 2: $270,400 × 1.04 = $281,216
Do not simply multiply 8% × $260,000 — compound appreciation requires applying the rate each year separately.
Tips for Exam Day
- Bring a calculator — PSI allows a basic calculator at the testing center
- Write out each step — do not try to do multi-step problems in your head
- Check units before finalizing — are you answering in dollars, square feet, or acres?
- Rearrange formulas when needed — if you know commission and rate, divide to find price
- Budget your time — if a math problem is taking too long, mark it and return
Practice More Before Your Exam
The best way to build confidence with exam math is repetition. Our NY Real Estate Practice Tests include math questions mixed with all other topic areas — the same format you will see on exam day.
For a full breakdown of every topic on the exam, see: NY Real Estate Exam Topics: A Complete Breakdown.
For a step-by-step study plan, see: How to Prepare for the NY Real Estate Exam.
Practice Exam Hub is not affiliated with the New York Department of State, PSI Exams, or any licensing authority. This content is for general informational and educational purposes only. Exam formats and requirements may change — always verify current information with the NY Department of State.
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