Freehold
Cap Rate & GRM formula
cap rate = net operating income ÷ property value
cap rate = net operating income ÷ property value
Worked example: A property has $48,000 NOI and is valued at $600,000.
8% cap rate
Every Freehold question shows why the right answer is right — and cites its source.
A home sells for $350,000 with a 6% commission rate. What is the total commission?
$21,000 — Multiply the sale price by the commission rate: $350,000 × 0.06 = $21,000. Commission is calculated on the full sale price unless the agreement states otherwise.
Source: PSI National Real Estate Exam Content Outline §11 Real Estate Calculations
A $150,000 interest-only loan carries a 6% annual interest rate. What is the monthly interest payment?
$750 — Annual interest is $150,000 × 0.06 = $9,000. Dividing by 12 months gives a monthly interest payment of $750.
Source: PSI National Real Estate Exam Content Outline §11 Real Estate Calculations
A home sells for $412,000 with a 5% commission rate. What is the total commission?
$20,600 — Commission equals the sale price times the commission rate: $412,000 × 5% = $20,600.
Source: PSI National Real Estate Exam Content Outline §11 Real Estate Calculations
All 14 formulas in one place: Real estate math reference