Real Estate Math
A Michigan property has a potential gross income of $48,000/year with a 7% vacancy rate. What is the effective gross income?
A$44,640✓ Correct
B$48,000
C$45,360
D$51,360
Explanation
EGI = PGI × (1 - Vacancy Rate) = $48,000 × (1 - 0.07) = $48,000 × 0.93 = $44,640. To solve this, multiply the relevant values: $48,000 at 7%.. The correct answer is $44,640.. This is a common calculation on the Michigan real estate exam.
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