10
QuizMultiple Choice

Real Estate Investments

Question 10 • 26-27 Ignite Financial Literacy Personal Finance - EL3403

Rosalyn is planning to sell her apartment complex. Ten years ago, she bought the eight-room complex for $420,000. The building has gained 2.2% in value every year since she bought it. She charges a monthly rent of $720 for each room, and pays $22,900 per year in upkeep costs. If Rosalyn has kept all of the rooms occupied continuously since she bought it, to the nearest hundred dollars, how much profit will she have made in total when she sells it?

Answer
A
$770,400
B
$554,600
C
$564,300
D
$492,300

Explanation

Rosalyn earns $720 × 8 × 12 = $69,120 in rent each year. After $22,900 in upkeep, her yearly profit is $46,220, or $462,200 over 10 years. The complex sells for about $420,000 × 1.022¹⁰ = $522,081, a gain of about $102,081. Adding the rental profit and increase in value gives about $564,281, which rounds to $564,300.

AI-written and checked against the verified answer.

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