Say that you purchase a house for $150,000 by getting a mortgage for $135,000 and paying a $15,000 down payment. If you get a 15-year mortgage with a 7 percent interest rate, what are the monthly payments? What would the loan balance be in five years? If the house appreciates at 4 percent per year, what will be the value of the house in five years? How much of this value is your equity?
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