Real Estate Math
An investor's property has gross potential income of $96,000 per year. Vacancy is 5%, and expenses are $28,000. If the investor purchases it at a 7% cap rate, what is the purchase price?
A$919,999
B$902,857✓ Correct
C$880,000
D$937,142
Explanation
EGI = $96,000 × (1 − 0.05) = $91,200.
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