Simple Math?

A math type question often seen on school finals as well as the State exam, involves calculating a purchase price given a loan amount and down payment percentage. The question may be slightly compounded by stating that the purchaser paid points amounting to some amount without giving the loan figure. Take a question like, "The buyer paid two points totalling $1,400 and had an 80% loan to value ratio. What was the purchase price?" Well, since we know that one point is 1% of the loan amount, we can calculate that the loan was equal to $70,000. Now since the buyer put down 20%, we would want to add that amount to the $70,000. This is done by dividing the loan amount by .80. In other words, if you want to add a percentage to something, divide by the residual. Another typical example is, "A seller tells an agent he wants to gross $100,000 after the brokerage fee. What selling price would be needed?" If the brokerage fee was 6%, you would need to divide $100,000 by .94 to add the .06 to it.