Real Estate Math
A commercial property has an NOI of $85,000. If it sells at a 7% cap rate, what is the sale price?
A$595,000
B$1,214,285✓ Correct
C$850,000
D$1,062,500
Explanation
Sale Price = NOI ÷ Cap Rate = $85,000 ÷ 0.07 = $1,214,285.71. To solve this, multiply the relevant values: $85,000 at 7%.. The correct answer is $1,214,285.. This is a common calculation on the Arizona real estate exam.
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