Say That You Purchase a House for $150,000 by Getting

question 95

Multiple Choice

Say that you purchase a house for $150,000 by getting a mortgage for $135,000 and paying a $15,000 down payment. Assume you get a 15-year mortgage with a 6% interest rate. If the house appreciates at a 2% rate per year, what will be the value of the house in 7 years? How much of this value is equity?

• A) $172,302.85; $65,101.91
• B) $172,302.85; $85615.01
• C) $185,612.09; $79,662.83
• D) $185,612.09; $81,038.72

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Definitions:

Liabilities

Liabilities are financial obligations or debts that a company or an individual owes, which are expected to be paid in the future.

Market Value

Market value is the current value at which an asset, company, or security can be bought or sold in the marketplace, determined by supply and demand dynamics.

Sales Commission

A payment made to a salesperson or broker for facilitating a sale, typically calculated as a percentage of the sale price.

Load Fund

A mutual fund that charges a fee (load) for buying or selling shares, in addition to the management fees.