Real Estate Math
A Louisiana commercial landlord wants to earn $15,000 per year net from a property after paying $4,200 in property taxes, $2,800 in insurance, and a 6% management fee. If the management fee is based on gross rent and the management fee and expenses must be covered, what annual gross rent must be charged? (Ignoring other expenses)
A$23,404✓ Correct
B$23,000
C$22,000
D$24,500
Explanation
Gross rent − (Gross rent × 6%) − $4,200 − $2,800 = $15,000. Gross rent × 0.94 = $22,000. Gross rent = $22,000 ÷ 0.94 = $23,404.
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