Real Estate Math
A property in Knoxville has an effective gross income of $85,000 and a vacancy rate built in at 5%. What was the gross potential income before vacancy?
A$89,473.68✓ Correct
B$90,000
C$80,750
D$85,000
Explanation
EGI = PGI × (1 − vacancy rate). $85,000 = PGI × 0.95. PGI = $85,000 ÷ 0.95 = $89,473.68. To solve this, multiply the relevant values: $85,000 at 5%.. The correct answer is $89,473.68.. This is a common calculation on the Tennessee real estate exam.
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