Final answer:
The purchase and sale of homes involve calculating the property's current market value and the owner's equity, which is the value minus any outstanding loans on the property.
Step-by-step explanation:
The question relates to real estate transactions and calculations regarding the purchase of a home, its current market value, and equity. Specifically, Freda bought a house for $150,000 in cash, and now it’s worth $250,000. Ben, on the other hand, purchased his house for $100,000 with a 20% down payment and took a bank loan for the remaining amount.
The value of his house has since increased to $160,000, and he has repaid $20,000 of the loan. Consequently, Freda's equity in her house is $250,000, as she owes nothing, while Ben's equity is $100,000, calculated by subtracting the remaining loan balance ($60,000) from the current value of his property ($160,000).