Real Estate Math
A NYC building sold for $3,200,000 with a cap rate of 5%. What is the NOI that supported this value?
A$64,000
B$160,000✓ Correct
C$320,000
D$640,000
Explanation
NOI = Value × Cap Rate = $3,200,000 × 5% = $3,200,000 × 0.05 = $160,000. To solve this, multiply the relevant values: $3,200,000 at 5%.. The correct answer is $160,000.. This is a common calculation on the New York real estate exam.
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