In 2004, Ted and Diane Paid 20% Down and Took

question 42

Multiple Choice

In 2004, Ted and Diane paid 20% down and took out a five-year mortgage for the balance of the $265,000 price of a home. After deducting interest, their monthly payments toward the principle balance owed on the mortgage was reduced by $2,000.00 each year. If they were to sell their home in 2009, it would sell for $215,000. What is the equity in their home?

• A) $13,000
• B) $50,000
• C) $163,000
• D) $202,000

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Definitions:

Mortgage

A loan specifically used to purchase real estate, where the property serves as collateral for the loan.

Profitable Business Model

An organizational strategic plan that outlines how a company creates, delivers, and captures value in a way that will generate profits.

Temporary Venture

A project or enterprise established for a limited time period, focusing on achieving a specific goal or fulfilling a particular market need.

Start-up

A young company founded to develop a unique product or service and bring it to market.