Seller is guaranteed a $300,000 net. Seller's closing cost and existing loan total $130,000. If a broker wishes to earn a 10% commission, what must be the selling price?

Question

Quizplus · Accepted Answer

To find the selling price, add the seller's net ($300,000) and the closing costs and loan ($130,000) to get $430,000. This is the amount after the broker's commission. To find the selling price before commission, divide $430,000 by (1 - 0.10) or 0.90, which equals $477,778.

Seller Is Guaranteed a $300,000 Net