Real Estate Math
A Maine property generates a monthly NOI of $4,500. At a 7.5% cap rate, the property's value is:
A$540,000
B$720,000✓ Correct
C$600,000
D$450,000
Explanation
Annual NOI = $4,500 × 12 = $54,000. Value = NOI ÷ Cap rate = $54,000 ÷ 0.075 = $720,000. To solve this, multiply the relevant values: $4,500 at 7.5%.. The correct answer is $720,000.. This is a common calculation on the Maine real estate exam.
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