Real Estate Math
A Mississippi property's net operating income is $22,500. If its value is $300,000, the capitalization rate is:
A6.5%
B7.0%
C7.5%✓ Correct
D8.0%
Explanation
Cap Rate = NOI ÷ Value = $22,500 ÷ $300,000 = 0.075 = 7.5%. Using the values given ($22,500, $300,000,), apply the appropriate formula.. The correct answer is 7.5%.. This is a common calculation on the Mississippi real estate exam.
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