How do you find Owners Equity?

Find the owner's equity for a $141,250 house after 10 years if the term of the loan was 30 years at 9%(12).?

• find the owners equity for a $141,250 house after 10 years if the term of the loan was 30 years at 9%(12). The down payment was 15%, and the appreciation was 2.75%/yr

• Answer:

  The second answer is wrong...you CAN calculate equity because you did, in fact, give an appreciation rate so value is present after 10 years. MY ANSWER: Owners Equity is EXACTLY $77,899.12 (Detailed explanation below) APPRECIATION CALCULATION: Initial price: $141,250 X 2.75% annual rate, calc ONCE per year THEREFORE $185,270.71 value after 10 years --------------------------------------… BALANCE AFTER 10 YEARS CALCULATION: Borrowed 85% of price (put $21,187.50 or 15% down) Loan amount was $120062.50 30 year loan, fully amortized, 12 payments per year THEREFORE balance owed would be $107371.59 after the 120th payment (10 years) --------------------------------------… MATH: 185,270.71 Value after 10 years -107,371.59 Principal Balance after 10 years =$77,899.12 is Owners Equity. Note you do NOT add back down payment because the down payment is already factored in (purchase price - down = starting loan balance)