Real Estate Math
A property in Sioux Falls has an annual NOI of $56,000 and sells at a 7% cap rate. What is the sale price?
A$700,000
B$800,000✓ Correct
C$900,000
D$1,000,000
Explanation
Value = $56,000 ÷ 0.07 = $800,000. To solve this, multiply the relevant values: $56,000 at 7%.. The correct answer is $800,000.. This is a common calculation on the South Dakota real estate exam.
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