To calculate: The equity the buyer has in home and the
Explanation of Solution
Given information:
House Price = $150,000
Initial investment = $30,000
House price after 2 years = $195,000
Outstanding mortgage balance =$118,000
Calculation of buyer’s equity in home:
The buyer’s equity is calculated as shown below:
Calculation of rate of
The buyer’s equity in home is $77,000.
The rate of return is 156.67%.
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Chapter 2 Solutions
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