Real Estate Math
A Mississippi rental property generates $4,500 monthly gross income. Vacancy and credit losses average 7%. Effective gross income (EGI) is:
A$54,000
B$50,220✓ Correct
C$49,815
D$47,700
Explanation
Annual gross income = $4,500 × 12 = $54,000. Vacancy loss = $54,000 × 0.07 = $3,780. EGI = $54,000 - $3,780 = $50,220. Effective gross income accounts for expected vacancy and credit (collection) losses.
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