Real Estate Math
A Maine condominium association has 24 units, each with an equal undivided interest. Annual common expenses are $96,000. Each unit's annual assessment is:
A$3,000
B$4,000✓ Correct
C$5,000
D$6,000
Explanation
Each unit's share = $96,000 ÷ 24 units = $4,000 per unit per year. Using the values given ($96,000), apply the appropriate formula..
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Key Terms to Know
Discount Points
Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
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