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Jamil and Kevin Purchase a Residential Property as an Investment

question 36

Essay

Jamil and Kevin purchase a residential property as an investment for $50,000. Each contributes $10,000 in cash and together they mortgage the property for $30,000 to raise the remainder of the purchase price. A few weeks later, Kevin decides to end the partnership and Jamil buys his interest in the property for $10,000. Advise Kevin.


Definitions:

Maximize

To increase to the greatest possible amount or degree or to achieve the highest possible outcome in a given situation.

Total Benefits

Total benefits refer to the complete range of economic, social, and personal advantages gained from an action or an investment.

Consumer Surplus

The difference between the highest price a consumer is willing to pay and the actual price they pay in the market.

Market Demand

The total amount of a product or service that consumers in a market are willing and able to purchase at a given price level in a given time period.

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