Real Estate Math
A Michigan property has an NOI of $50,000 and sells at a 7.5% cap rate. What is the sale price?
A$375,000
B$500,000
C$666,667✓ Correct
D$750,000
Explanation
Value = NOI / Cap Rate = $50,000 / 0.075 = $666,667. To solve this, multiply the relevant values: $50,000 at 7.5%.. The correct answer is $666,667.. This is a common calculation on the Michigan real estate exam.
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