Finance
A Louisiana borrower obtains a $200,000 mortgage at 6.5% interest for 30 years. The monthly principal and interest payment is approximately $1,264. After making payments for 5 years, the borrower still owes approximately $186,000. The equity in the home (purchase price $240,000, current value $255,000) is approximately:
A$54,000
B$69,000✓ Correct
C$40,000
D$55,000
Explanation
Equity = Current Market Value − Outstanding Loan Balance = $255,000 − $186,000 = $69,000. To solve this, multiply the relevant values: $200,000 and $1,264 at 6.
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