Real Estate Math
A building has 8 apartments each renting for $950 per month. The annual vacancy rate is 5%. What is the effective gross annual income?
A$85,860✓ Correct
B$86,640
C$88,860
D$91,200
Explanation
Gross potential income = 8 × $950 × 12 = $91,200. Vacancy loss = $91,200 × 0.05 = $4,560. EGI = $91,200 − $4,560 = $86,640. Let me recheck: 8 × 950 = 7,600 × 12 = $91,200 × 0.95 = $86,640.
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