Gary Buys a House for $200,000 Using $10,000 of His

question 13

Multiple Choice

Gary buys a house for $200,000 using $10,000 of his own money and gets a mortgage for the remaining $190,000.If the value of the house increases 7%,what will be the percentage increase in Gary's investment?

• A) 25%
• B) 7%
• C) 14%
• D) 70%
• E) 140%

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Definitions:

Net Income

The amount of profit left after all expenses, taxes, and costs have been subtracted from total revenue.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, often referred to as shareholders' equity.

Common Stock Dividends Distributable

A liability account representing the amount of dividends declared by a company's board of directors but not yet paid to common shareholders.

Paid-in Capital

Funds raised by a company in exchange for issuing shares of its stock, representing the investment made by shareholders into the business.