Mortgage Loan Originator (MLO) Licensing Practice Test

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Prepare for the Mortgage Loan Originator Licensing Exam. Study with flashcards and multiple choice questions, each question offers hints and explanations. Ace your exam with confidence!

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How do you calculate annual income from bi-weekly salary?

Annual income ÷ 24
Bi-weekly salary x 26
Bi-weekly salary x 12
Monthly income ÷ 2

The correct answer is: Bi-weekly salary x 26

To calculate annual income from a bi-weekly salary, it is essential to understand how many pay periods occur in a year. Since a bi-weekly salary means the employee is paid every two weeks, there are typically 26 pay periods in a year (52 weeks divided by 2 weeks per pay period). Therefore, multiplying the bi-weekly salary by 26 gives the total annual income. This method accurately accounts for all pay periods and provides a comprehensive figure for yearly earnings, which is crucial for understanding income levels in mortgage calculations and loan origination processes. The other options do not yield the correct annual income because they do not consider the exact number of pay periods for someone receiving bi-weekly payments.