Real Estate Math
A property's NOI is $36,000 and it sells at a 7.2% cap rate. What is the sale price?
A$450,000
B$475,000
C$500,000✓ Correct
D$525,000
Explanation
Value = NOI ÷ Cap Rate = $36,000 ÷ 0.072 = $500,000. To solve this, multiply the relevant values: $36,000 at 7.2%.. The correct answer is $500,000.. This is a common calculation on the Idaho real estate exam.
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