Final answer:
The question involves calculating the increased value and equity of homes, a concept in high school mathematics. The percentage increases and equity calculations demonstrate how property values can significantly appreciate over time, which aligns with historical data on home prices.
Step-by-step explanation:
The question relates to the increase in house values and involves understanding percentage increase, equity calculations, and financial returns on property investments. Freda's scenario illustrates a substantial rise in property value, where her home's worth soared from $150,000 to $250,000.
To determine the percentage increase, one would calculate the difference between the selling and purchase price and then divide by the original price. Freda's home appreciated by approximately 66.67%. In Ben's case, after buying a house for $100,000 with a 20% down payment, the value of his property increased to $160,000, and he has paid off $20,000 of the loan. His remaining loan balance would be $60,000, and thus his equity in the property would be $100,000.
These examples align with historical data indicating house prices generally rise over time. According to FRED® Economic Data, the median sales price of family homes increased at an average of 3.1% per year from 1990 to 2016.