REAL ESTATE MATH

By: Archt. MARITES G. BALMAS

Registered Architect
Licensed Real Estate Broker
Licensed Real Estate Appraiser
Basic Math Computation
Skills
Real Numbers
Fundamental Operations on Real Numbers

Addition, subtraction, multiplication and division of real numbers

follow the rules of signed numbers. The value of signed numbers with
positive sign is increasing when counting direction is going to the right
starting from zero. However, if the signed numbers with negative sign
starting from zero is decreasing.

Signed numbers are composed of positive and negative

numbers in the number line.

______________________________________________________
-2 -1 0 1 2 3 4 5 …………
 Addition of Signed Numbers:
To add numbers having like signs either positive or negative get the sum
and copy the common sign of the addends.

To add numbers having unlike signs subtract the addends and get the
sign of the number to their greater absolute value.
 Examples:

Like Signs Unlike Signs

1. 4 + 5 = 9 1. -4 + 5 = 1
2. (-5) + (-5)= -10 2. (-5) + 5 = 0
 Subtraction of Signed
Numbers:
To subtract numbers having like and unlike signs change the sign of the
subtrahend and proceed to subtraction if the signs become unlike and
affix the sign of the greater number, proceed to addition if the signs
become like and affix the sign.
Examples:

Like Signs Unlike Signs

1. 5 1. 5
- 5 - -5
--------- ----------
0 10

2. (-2) - -6 = 4 2. (-2) – 6 = -8
 Multiplication of Signed
Numbers
Multiplication of Signed Numbers

To multiply numbers having like signs either

positive or negative get the products and affix the positive sign.

To multiply numbers having unlike signs get the products

and affix the signs of negative.
Examples:
Examples:

Like Signs Unlike Signs

1. 5* 5 = 25 1. 6* -7 = -42
2. -4*-3 = 12 2. -2*4 = -8
 Division of Signed Numbers

To divide numbers having like signs either positive or negative get the
quotient and affix the sign of positive.
To divide numbers having unlike signs get the quotient and affix the sign
of negative.
Examples:

Like Signs Unlike Signs

1. -120/-2 = 60 1. -120/20 = -60

2. 14/7 = 2 2. 32/-8 = -4
 Simplifying Combined
Operations:

Problem that feature multiple operations involve several calculations.

Remember, parenthesis are used to identify the calculation/s to be
completed first. Also, usually you multiply or divide before adding or
subtracting.
 Simplifying Combined Operations:

Example 1.) (2 + 4) – (8-2) * 3 = 6 – 6*3

= 6 – 18
= -12

Example 2.) 8 + (-3) = 8-3

-4 +2 -2
= 5/-2
Example 3.) (-5) (-5) (5) = 125 or – 2.5
10 + (-5) -50

Example 4.) 2/3*3/2 = 6/6

12/2 6
= 1/6
Fractions, Percentages, and Decimals
Fractions
A fraction is a numeric representation showing a part of the whole.
Proper Fraction
A proper fraction is one whose numerator is less than its denominator. It is a part of
the total, fraction and its value is always less than 1.

eXamPle:

1/2 1/4 1/5 5/19 7/100

1← numerator

2← denominator
The numerator (top number of a fraction) indicates how many parts
there are in the fractional amount.
The denominator (bottom number of a fraction) indicates how many parts
make up the whole.

The fraction ½ means 1 part of the total that is made up of 2 equal parts.
The fraction ¾ means 3 parts of the total that is made up of 4 equal parts.
The figure 35 percent means 35 parts out of the 100 parts that make up
the total. It can also be written as the fraction 35/100 or as the decimal
0.35.
Improper Fractions
An improper fraction is one whose numerator is equal to or greater than its
denominator. The value of an improper fraction is more than 1.
e X a m P l e:
5/4 10/9 81/71

To change an improper fraction to a whole number, divide the numerator by the

denominator. Any part left over will be shown as a decimal.
e X a m P l e : Change 8/5 to a whole number.
8/5 =1.6
Mixed Number

A mixed number (a whole number and a fraction), such as 1¾, can be

changed by converting the fraction to a decimal (divide the top number
by the bottom number) and adding back the whole number.

eXamPle: 1¾
3 ÷ 4 = 0.75
0.75 + 1 = 1.75
PERCENTAGE

Percent (or the symbol “%”) is actually a fraction multiplied by 100. In

effect a “percent” means the number of parts in a base of 100. Thus:
10 % - means 10 parts of 100 or 10/100
To obtain the percentage, always multiply a fraction by 100. Vice-versa,
to obtain the fraction in decimal form, divide the percentage by 100.
For example, 50 percent means 50 parts out of a total of 100 parts (100
parts equal 1 whole), and 100 percent means all 100 of the 100 total
parts, or 1 whole unit.

50 percent means ⁵⁰⁄₁₀₀, or 0.50, or ½

100 percent means ¹⁰⁰⁄₁₀₀, or 1.00, or
 Changing Fractions to
Decimals
Placing the place values of the numbers to the right of the decimal point
makes it easy to change fractions to decimal fractions.
Examples:
Fraction Decimal Fraction Number of
decimal places
to the right
1. Nine Tenths 9/10 0.9 1
2. Nine Hundredths 9/100 0.09 2
3. Nine Thousandths 9/1000 0.009 3
4. Nine Ten Thousandths 9/10,000 00009 4
Changing Decimals To Percentages

To change a decimal into a percentage, move the decimal point two

places to the right and add the “%” sign. Therefore, you can change the
number 0.50 to a percentage by moving the decimal point (.) two
places or two digits to the right and adding the percent symbol (%). By
moving the decimal point two places to the right, you actually multiply
0.50 by 100, to equal 50. When you add the percent symbol, you
multiply the 0.50 by 100 according to the defini-tion of percent, so that
0.50 equals 50 percent. Thus, the actual value hasn’t changed at all, or
you are back where you started.
Any percentage that is less than 100 percent means a part or fraction
of 100 percent or the entire unit. For example, because 99 percent
means 99 parts out of 100 parts, it is less than the total.

eXamPles: 0.10 = 10%

1.00 = 100%
0.98 = 98%
0.987 = 98.7%
Changing Percentages To Decimals
The process of converting percentages to decimals is the reverse of the one you
just completed. To change a percentage to a decimal, move the decimal point two
places to the left and drop the “%” sign.
All numbers have a decimal point, although it is usually not shown when only zeros
follow it.
e X a m P l e s :99 is really 99.0 6 is really 6.0
$1 is the same as $1.00
So, percentages can be readily converted to decimals.
eXamPles:
99% = 99.0% = 0.990 = 0.99
6% = 6.0% = 0.060 = 0.06
5% = 5.0% = 0.050 = 0.05
70% = 70.0% = 0.700 = 0.70

Note: Adding zeros to the right of a decimal point after the last figure
does not change the value of the number.
 Changing Fractions to
Percentages

1. Divide the numerator by the denominator.

2. Move the decimal point two places to the right
3. Add the percent symbol.
 Examples:
1/8 = 0.125 = 12.5%
1/100 = 0.01 = 1%
 Example:
8 /80 = 0.1 = 10%
8 is the numerator
80 is the denominator
Note: When you change decimal or fraction to percent, make sure that
you change the answer to a percent before you round to the indicated
digit.
Example:
1/6 rounded to the nearest hundredth percent
0.1666667 = 16.66667 = 16.67%
 Changing Mixed Numbers to
Decimal
Mixed number, is a combination of a whole number and a proper
fraction. We can change mixed numbers to decimals by two steps: (1)
change the proper fraction to decimal, (2) Add the results in step (1)
from the whole number.
 Example:
2 ¼ =2.25
2 is the whole number
¼ is the proper fraction
Solution:
Step (1): ¼ = 0.25
Step (2): 2 + 0.25 = 2.25
 Changing Decimal Number and
Mixed Number to Fractions
A mixed number is a combination of a whole number and a decimal.
To change decimal number and mixed number to fraction, this are the
following steps:
1. Place the number to the right of the decimal point in the numerator
of the fraction. Do not put the decimal point.
2. Put a number 1 in the denominator of the fraction.
3. Count the number of digits to the right of the decimal point. Add the
same number of zeroes to the denominator of the fraction. For mixed
numbers, add the fraction to the whole number
Examples:
Step 1 Step 2 Places Step 4
1.) 0.9 9 9/1 1 9/10
2.) 0.99 99 99/1 2 99/100
3.) 99 ½ 995 995/1 3 995/1000
Adding Decimals

Decimals are added like whole numbers. When you add longhand,
decimal points must be lined up under each other, as shown in the
examples.
300
e X a m P l e s : 0.3 0.891
5 0.005 0.05
+ 590 + 0.59 + 0.063
895 0.895 1.004
Subtracting Decimals

Decimals are subtracted like whole numbers. Again, line up the decimal
points.
eXamPles: 861 0.861 0.549
– 190 – 0.190 – 0.32
671 0.671 0.229
Multiplying Decimals
To multiply decimals, use the following:
1. Multiply the decimal numbers as whole numbers ignoring the decimals.
2. Count and total the number of the decimal places in the multiplier
multiplicand.
3. Starting at the right in the product, count the number of decimal places you
totaled in step 2 insert the decimal at this point.
Example
4.006 (3 decimal positions)
× 0.51 (2decimal positions)
2.04306
Dividing Decimals
If the divisor in your decimal division problem is a whole number, first place the decimal point in the
quotient directly above the decimal in the dividend. Then divide as usual. If the divisor has a
decimal, complete the following:
1. Move the decimal in the divisor to the right make it whole number.
2. Move the decimal in the dividend to the right the same number of positions that you moved the
decimal in the divisor (step 1)
3. Put the decimal in the quotient above the position of the decimal in the dividend. Divide as usual.
eXamPle: 6 ÷ 0.5 = 12
12
0.5 60
-5
10
- 10
0
Shortcuts to Multiplication and Division of
Decimal Numbers
When multiplying by multiplies of 10, count the zeros in the multiplier. Move
the decimal in the multiplicand the same number of places to the right as
there are zeros in the multiplier. When dividing by multiples of 10, move the
decimal in the dividend the same number of places to the left as there are
zeros in the divisor.
Multiplication
Example 5.65 x 10 = 56.5 (1 place to the right)
5.65 x 10 = 56.5 (2 places to the right)
Division
Example 5.65 ÷ 10 = .565 (1 place to the left)
5.65 ÷ 100 = .0565 (2places to the left)
Simple interest
Simple interest is a type of interest that is applied to the amount
borrowed or invested for the entire duration of the loan, without taking
any other factors into account, such as past interest (paid or charged)
or any other financial considerations. Simple interest is generally
applied to short-term loans, usually one year or less, that are
administered by financial companies. The same applies to money
invested for a similarly short period of time.
Finding Unknown in Simple Interest Formula
When you know the principal amount, the rate and the time. The amount of
interest can be calculated by using the simple interest formula is as follows:
Interest = Principal × Rate × Time
where:
'Interest' is the total amount of interest paid,
'Principal' is the amount lent or borrowed,
'Rate' is the percentage of the principal charged as interest each year. The
rate is expressed as a decimal fraction, so percentages must be divided by
100. For example, if the rate is 15%, then use 15/100 or 0.15 in the formula.
'Time' is the time in years of the loan.
The simple interest formula is often abbreviated in this form:
I=PRT
Three other variations of this formula are used to find P, R and T:
Using the Triangular Formula:
I
P Ir t
Finding the Interest
Ian is investing P4,000 for 2 years. The interest rate is 5.5%. How much
interest will Ian after 2 ears.
Solution:
I = Prt
= (4,000)(.055)(2)
= P440
• Ian will earn P440 in interest
Finding the Rate
Shirley got $1200.00 loan for 2 years. She paid $90.00 in interest. What
was the interest rate?
Solution:
R = I/Pt
=90/(1200)(2)
= 90/2400
= 0.0375
= 3.75%
The interest rate is 3.75%
Finding the Principal

Douglas made a 3- year investment. The interest rate was 4.5%. After 3
years he earned $675 in interest. How much was his original interest?
Solution:
P = I/(rt)
= 675/(.045)(3)
= 675/(0.135)
= $5000.00
Find the Principal When you Know the
Interest, Rate, and Time
What amount of principal will earn interest of $175.50 at 6.5% in 8 months?
Once again you can use the derive formula of I=Prt which becomes P = I/rt.
Use the example above to help you. Remember, 8 months can be converted
to days or, I can use 8/12 and move the 12 into the numerator in my formula.
Principal = Interest/(rate X time)
P= 175.5/ (.065 X 8/12)
=175.5 X 12/ .065 X 8
= 2106/0.52
=$4050
Finding the Time
Kim got a loan for $4700 to buy a used car. The interest rate was 7.5%.
She paid $1057.50 interest. How many years did it take her to pay off
her loan?
Solution:
T = I/(Pr)
= 1057.50/(4700)(0.075)
= 1057.50/352.50
=3 years
COMPUTATION FOR THE SELLING
PRICE, PRICE PER SQUARE
METER, AND LOT AREA
Using the triangular formula
Legend:
SP
P/m2 I Area
SP = Selling Price
P/m2 = Per meter square
SP = P/m2 X Area P/m2 = SP ÷ Area Area =SP ÷ P/m2
 Example Problem 1:
Sample Problem 1:
Ms. Bulaklak Dela Cruz was offered a property located in Bagong Bantay, Quezon City
with a total lot area of 200 sq.m. at the price of Twenty Thousand pesos
(P20,000.00)/sq.m.) per square meter. What is the value of the property?
Given: Solution:
Area = 200 sqm. 200 sqm.
P/m2 = P20,000.00/sqm. X P20,000.00/sqm.
SP =? Answer: P4,000,000.00
 Example Problem 2:
Ms. Diwata de Dios was required to pay a total price amounting to One Million Six
Hundred Twenty Thousand Pesos (P1,620,000.00) for a 900 sq.m. How much is the
price per square meter of the said property?
Given: Solution:
SP = P1,620,000.00 P1,620,000.00
Area = 900 sq.m. ÷ 900 sq.m
P/m2 =? Answer: P1,800.00 per sq.m.
 Example Problem 3:
Ms. Lualhati Cruz sell her vacant lot fronting the secondary school in
Quirino for the amount of Seven Million Eight Hundred Forty Thousand
Pesos (P7,840,000,000.00) at the rate of the existing fair market value
of Twenty Eight Thousand Pesos (P28,000.00)/sq.m.). What is the lot
area of the property ?
Given: Solution:
SP = P7,840,000,000.00 P7,840,000,000.00
P/m2 = P28,000.00.00 ÷ P28,000.00)/sq.m.
Area = ? Answer: 280 per sq.m.
Thank you!