Real Estate Math
A Massachusetts tenant with a $1,800/month lease has a lease with a CPI escalation clause. If CPI increases 3.5% in year 2, what is the new monthly rent?
A$1,863✓ Correct
B$1,800
C$1,881
D$1,890
Explanation
New rent = $1,800 × (1 + 0.035) = $1,800 × 1.035 = $1,863. To solve this, multiply the relevant values: $1,800 at 3.5%.. The correct answer is $1,863.. This is a common calculation on the Massachusetts real estate exam.
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