Real Estate Math
If a Utah property earns $60,000 NOI and is purchased at a 5.5% cap rate, what is the purchase price?
A$60,000✓ Correct
B$900,000
C$1,200,000
D$750,000
Explanation
Purchase price = NOI ÷ Cap Rate = $60,000 ÷ 0.055 ≈ $1,090,909. To solve this, multiply the relevant values: $60,000 at 5.5%.. The correct answer is $60,000.. This is a common calculation on the Utah real estate exam.
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