Real Estate Math
A Washington building has 8 units, each renting for $1,400/month. The vacancy rate is 10%. What is the effective gross income (EGI) per year?
A$108,864
B$120,960✓ Correct
C$134,400
D$144,000
Explanation
Potential Gross Income = 8 × $1,400 × 12 = $134,400. EGI = $134,400 × (1 − 0.10) = $134,400 × 0.90 = $120,960.
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