California Real Estate Practice Exam

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Study for the California Real Estate Exam. Engage with multiple choice questions and detailed explanations to sharpen your knowledge. Get ready to ace 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%