Question

Yvonne Smith expects $100 worth of value from an addition to her

home. A contractor can do the job at a cost of $25 and offers to do
the job for $50. During construction, the buyer would have to rent?

Answer 1

To calculate the equity in a house, subtract the amount owed from the current value. For Freda, her equity is $250,000. For Frank, his equity is $100,000.

Step-by-step explanation:

To calculate the equity in a house, you subtract the amount owed on the house from its current value. For example, in the case of Freda, her house is currently worth $250,000 and she owes nothing on it. Therefore, her equity is the whole $250,000.

For the case of Frank, his house is currently worth $160,000 and he owes $60,000 on it. So his equity would be $100,000 ($160,000 - $60,000).