Real Estate Math
A property generates $3,200 per month in rent. The cap rate is 6%. What is the estimated annual value of the property?
A$534,000
B$576,000
C$640,000✓ Correct
D$720,000
Explanation
Annual NOI (assumed) = $3,200 × 12 = $38,400. Value = $38,400 ÷ 0.06 = $640,000. To solve this, multiply the relevant values: $3,200 at 6%.. The correct answer is $640,000.. This is a common calculation on the Louisiana real estate exam.
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