A House Is Purchased with a Down Payment of $25,000

question 33

Multiple Choice

A house is purchased with a down payment of $25,000 with the remaining $175,000 financed through a mortgage at j₁₂ = 9% with monthly payments of $1500 for as long as necessary.What is the seller's equity after 15 years (180 payments) ?

• A)$118,413
• B)$104,049
• C)$95,951
• D)$70,951

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Definitions:

Double Its Inputs

The act of a firm increasing the amount of inputs used in production, such as labor and capital, by two times.

Level of Output

The quantity of goods or services produced by a firm or economy during a specific time period.

Cobb-Douglas

A mathematical function used in economic models to represent the relationship between two or more inputs and the resulting level of output.

Production Function

A mathematical representation of the relationship between inputs used in production and the output generated from those inputs.