A rectangular lot measures 150 feet by 200 feet. If the lot sold for $8.50 per square foot, what was the total sale price?
Correct Answer
C) $255,000
Why this is correct: First, calculate the lot area: length * width = 150 feet * 200 feet = 30,000 square feet. Then, multiply the area by the price per square foot: 30,000 sq ft * $8.50/sq ft = $255,000. Why the other choices are wrong: $300,000 might result from multiplying 150*200 to get 30,000 and then multiplying by $10.00. $275,000 is not supported by the calculation. $225,000 might result from using an area of 30,000 sq ft and a price of $7.50 per sq ft. Exam tip: For area problems: Area = Length * Width. Total Price = Area * Price per Unit Area.
Why This Is the Correct Answer
Option B correctly calculates the area as 150 × 200 = 30,000 square feet. Then multiplies this area by the price per square foot: 30,000 × $8.50 = $255,000. This follows the standard formula for determining total price from unit pricing. The calculation is straightforward multiplication with no complex conversions required.
Why the Other Options Are Wrong
Option A: $300,000
This answer of $300,000 suggests using $10.00 per square foot instead of the given $8.50, or some other significant calculation error.
Option B: $275,000
This answer of $275,000 indicates a calculation error, possibly using a higher price per square foot like $9.17 or miscalculating the total area.
Option D: $225,000
This answer of $225,000 suggests an error in either area calculation or price per square foot multiplication, possibly using $7.50 per square foot instead of $8.50.
L × W × $ Formula
Remember 'LW$' - Length × Width × $ per square foot. Think 'Love Wins with $' to remember the sequence: measure Length, multiply by Width to get area, then multiply by $ per square foot for total value.
How to use: When you see lot dimensions and price per square foot, immediately think 'LW$' and perform the three-step calculation: Length × Width = Area, then Area × Price = Total Value.
Exam Tip
Always double-check your area calculation first (150 × 200 = 30,000), then multiply by the unit price. Write out each step to avoid calculation errors under exam pressure.
Common Mistakes to Avoid
- -Forgetting to multiply length by width before applying the price per square foot
- -Using the wrong price per square foot from the problem
- -Making arithmetic errors in basic multiplication
Concept Deep Dive
Analysis
This question tests fundamental area calculation and unit pricing concepts essential for real estate appraisal. It requires converting linear measurements to square footage, then applying a per-square-foot price to determine total value. This type of calculation is foundational for the sales comparison approach and land valuation methods. The question combines basic geometry with real estate pricing principles, which appraisers use daily when analyzing comparable sales and determining property values.
Background Knowledge
Appraisers must be proficient in area calculations since property values are often expressed on a per-square-foot basis for comparison purposes. Understanding how to convert linear dimensions to area measurements and apply unit pricing is fundamental to the sales comparison approach and land valuation.
Real-World Application
Appraisers regularly use this calculation when analyzing vacant land sales or determining the land value component of improved properties. For example, when three comparable land sales show prices of $8.00, $8.50, and $9.00 per square foot, the appraiser applies these rates to the subject property's square footage to estimate value.
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