Real Estate Math
A Virginia property is purchased for $600,000 with a 25% down payment. If the property appreciates 5% in year one, what is the return on equity (cash-on-cash appreciation)?
A5%
B10%
C20%✓ Correct
D25%
Explanation
Appreciation = $600,000 × 5% = $30,000. Down payment (equity invested) = $600,000 × 25% = $150,000.
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