Question

Robert owns a $180,000 townhouse and still has an unpaid mortgage of $155,000. His equity in the townhouse is:

a) $35,000
b) $325,000
c) $180,000
d) $155,000

Answer 1

Robert's equity in the townhouse is $25,000.

Step-by-step explanation:

Equity is the market value of an asset minus any outstanding liabilities. In this case, Robert's townhouse is valued at $180,000 and he still owes $155,000 on his mortgage. To calculate his equity, we subtract the mortgage amount from the value of the townhouse: $180,000 - $155,000 = $25,000. Therefore, Robert's equity in the townhouse is $25,000.