Real Estate Math
A Louisiana property has a net operating income of $32,000 and sells at a 5.5% cap rate. What is the sale price?
A$581,818✓ Correct
B$560,000
C$640,000
D$520,000
Explanation
Value = NOI ÷ Cap Rate = $32,000 ÷ 0.055 = $581,818 (rounded to nearest dollar). To solve this, multiply the relevant values: $32,000 at 5.5%.. The correct answer is $581,818.. This is a common calculation on the Louisiana real estate exam.
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