Two years ago Sam purchased a duplex for $180,000 cash. She has rented one side for $1,000/month. Taxes have been $1,800 every six months. She put new carpeting throughout the duplex and gave it fresh paint when she purchased it, for a total cost of about $5,000. She now is considering selling the duplex and moving into a single family home.

a. At what price would she want to sell the duplex to have earned a 10% ROI?

b. If she goes through a realtor to sell the property, they will charge a commission of 6% of the selling price. To maintain a 10% ROI, what will be the asking price to accommodate the expense of the realtor’s fee?

c. She is offered $225,000 for the duplex. After taking off the 6% realtor’s commission, what was her actual ROI?