Respuesta :
Answer:
The maximum amount he can borrow is $126,800.
Explanation:
Given:
Michael purchased a home for $380,000.
Market value of home = $336,000.
Current mortgage balance = $142,000.
Rate of borrowing at the market value = 80%.
Now, to find the maximum of amount Michael can borrow.
So, we find first the maximum mortgage amount:
Maximum mortgage amount = 80% of market value.
[tex]=\frac{80}{100}\times 336,000[/tex]
[tex]=0.80\times 336,000[/tex]
[tex]=\$268,800.[/tex]
As, he still owes $142,000 mortgage in his home.
Now, to get the maximum amount he can borrow we use formula:
Maximum amount he can borrow = Maximum mortgage amount - Current mortgage balance.
Maximum amount he can borrow [tex]=\$268,800-\$142,000[/tex]
Maximum amount he can borrow [tex]=\$126,800.[/tex]
Therefore, the maximum amount he can borrow is $126,800.
