Real Estate Math
A buyer in Hillsboro, Oregon purchases a home for $475,000 with a 5% down payment. After 3 years, the home is worth $510,000. What is the buyer's equity?
A$23,750
B$58,750 (assuming no principal paydown)✓ Correct
C$35,000
D$510,000
Explanation
Original equity = 5% × $475,000 = $23,750 (down payment). Appreciation = $510,000 − $475,000 = $35,000. Total equity (before paydown) ≈ $23,750 + $35,000 = $58,750. Note: Actual equity would also include principal paid down over 3 years of mortgage payments.
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