Real Estate Math
A North Dakota home was purchased for $210,000 with a 10% down payment. After 5 years of paying down the mortgage, the outstanding balance is $180,000 and the home is now worth $265,000. What is the homeowner's equity?
A$65,000
B$75,000
C$85,000✓ Correct
D$90,000
Explanation
Equity = Current market value − Outstanding loan balance = $265,000 − $180,000 = $85,000. To solve this, multiply the relevant values: $210,000 and $180,000 at 10%.. The correct answer is $85,000.. This is a common calculation on the North Dakota real estate exam.
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