Real Estate Math
A South Dakota property has a capitalization rate of 7.5% and a value of $800,000. What is the annual NOI?
A$55,000
B$60,000✓ Correct
C$65,000
D$70,000
Explanation
NOI = Value × Cap Rate = $800,000 × 7.5% = $800,000 × 0.075 = $60,000. To solve this, multiply the relevant values: $800,000 at 7.5%.. The correct answer is $60,000.. This is a common calculation on the South Dakota real estate exam.
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