Real Estate Math
A Maryland property's NOI is $72,000 per year. The investor purchases it at a 7.5% cap rate. The purchase price is:
A$540,000
B$720,000
C$960,000✓ Correct
D$1,080,000
Explanation
Price = NOI ÷ Cap Rate = $72,000 ÷ 0.075 = $960,000. To solve this, multiply the relevant values: $72,000 at 7.5%.. The correct answer is $960,000.. This is a common calculation on the Maryland real estate exam.
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