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19 January, 13:07

Shelly bought a house five years ago for $150,000 and obtained an 80% loan. Now the home is worth $140,000 and her loan balance has been reduced by $12,000. What is Shelly's current equity?

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  1. 19 January, 13:10
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    The current equity is $32,000

    Step-by-step explanation:

    Here, we are to calculate the current equity of the House

    Value of house initially is $150,000

    loan borrowed is 80% of this

    = 80/100 * 150,000 = $120,000

    Now the house value is 140,000 and the loan amount is reduced to 12,000

    The outstanding loan amount to pay would be 120,000-12,000 = 108,000

    The current equity is thus = Assets - liability = 140,000-108,000 = $32,000
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