Real Estate Math
A 10-unit apartment building in Anchorage generates $1,200/month per unit. Vacancy and credit loss is 5%. What is the Effective Gross Income (EGI) per year?
A$136,800✓ Correct
B$137,400
C$144,000
D$153,600
Explanation
Potential Gross Income (PGI) = 10 units × $1,200/month × 12 months = $144,000/year. EGI = PGI × (1 − Vacancy Rate) = $144,000 × 0.95 = $136,800.
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