• Josh purchased a condominium 5 years ago for $190,000. He made a down payment of 20% and financed the balance with a 30-year conventional mortgage to be amortized through monthly payments with an interest rate of 4%/year compounded monthly on the unpaid balance. What is the present value (in dollars) of the loan after 5 years of ownership? (Round your answer to the nearest cent.) 
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• The condominium is now appraised at $250,000. Josh plans to start his own business and wishes to tap into the equity that he has in the condominium. If Josh can secure a new 30-year conventional mortgage at the same rate to refinance his condominium based on a loan of 80% of the appraised value, how much equity (in dollars) will he have after the new loan? How much cash (in dollars) can Josh muster for his business?

Answer rating: 100% (QA)

To find the present value of the loan after 5 years of ownership we need to use the formula for pres... View the full answer