Real Estate Math
A Hawaii investor's return on equity is 8% on a property worth $1,200,000 with a $480,000 loan. What is the annual cash-on-cash return amount?
AA. $57,600✓ Correct
BB. $48,000
CC. $96,000
DD. $38,400
Explanation
Equity = $1,200,000 - $480,000 = $720,000. Cash-on-cash at 8% = $720,000 × 0.08 = $57,600. To solve this, multiply the relevant values: $1,200,000 and $480,000 at 8%.. The correct answer is A. $57,600.. This is a common calculation on the Hawaii real estate exam.
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