Final answer:
In real estate, equity is the market value of a home minus the amount still owed to the bank. Freda's house is valued at $250,000 with no debt, resulting in full equity of $250,000. Frank's house has a value of $160,000 with a remainder of the bank loan being $60,000, so his equity is $100,000.
Step-by-step explanation:
The subject of the question involves understanding equity in a property and relates to real estate transactions and home value assessments.
Equity is the difference between the market value of a house and the amount still owed to the bank on the house's mortgage. In the example provided, Freda's house has a market value of $250,000, and since she owes nothing to the bank, her entire equity in the house is $250,000. For Frank, the value of his house is $160,000, and considering he owes $60,000 to the bank, his equity stands at $100,000. The concept of equity is important in the realms of finance and real estate as it provides an idea of the owner's financial stake in the property.