Question

A property owner has an office building with $34,000 in equity. If the owner still owes $185,000 on the mortgage, what is the market value of the office building?

(Market Value - Remaining Mortgage or Loan Amounts = Equity)

Answer 1

The market value of the office building is calculated by adding the owner's equity of $34,000 to the remaining mortgage amount of $185,000, resulting in a total market value of $219,000.

Step-by-step explanation:

To determine the market value of the office building, we use the relationship between equity, the amount owed on the mortgage, and the market value. Equity represents the owner's financial interest in a property and is calculated as the difference between the market value of the property and the remaining amount owed on any mortgages or loans. The formula to calculate the market value is:

Market Value = Equity + Remaining Mortgage

Given that the property owner has $34,000 in equity and still owes $185,000 on the mortgage, the market value can be calculated as follows:

Market Value = $34,000 (Equity) + $185,000 (Remaining Mortgage)

Market Value = $219,000

Therefore, the market value of the office building is $219,000.