Real Estate Math
A NH property rents for $1,950/month. Over 12 months, the property has 6 weeks of vacancy. What is the effective gross income for the year?
A$20,700✓ Correct
B$23,400
C$21,450
D$20,475
Explanation
Annual potential income = $1,950 × 12 = $23,400. Vacancy = 6 weeks × ($1,950 / 4.33 weeks/month) = 6 × $450 = $2,700 (approximate). More precisely: $1,950/month × 12/52 weeks per year × 6 weeks = $1,950 × 6/52 × 12 = $2,700. EGI = $23,400 − $2,700 = $20,700. Closest: $20,925 uses $1,950 × (52-6)/52 × 12 / 12 = $1,950 × 46/52 = $1,725 × 12 = $20,700. Approximately $20,925 if calculated differently.
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