Real Estate Math
A South Dakota rental property has an annual effective gross income of $48,000 and a vacancy rate of 5%. What is the potential gross income?
A$45,600
B$48,000
C$50,526✓ Correct
D$52,000
Explanation
EGI = PGI × (1 − Vacancy). PGI = EGI ÷ (1 − 0.05) = $48,000 ÷ 0.95 = $50,526. To solve this, multiply the relevant values: $48,000 at 5%.. The correct answer is $50,526.. This is a common calculation on the South Dakota real estate exam.
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