Michelle Heaster is thinking about building an addition on her home. The house wasrecently appraised at $154,000, and the balance on her existing first mortgage is$88,600. If Michelle's bank is willing to loan up to 70% of the appraised value, does shehave enough equity in the house to finance a $25,000 addition?Appraised value =Rate =Balance of first mortgage =Potential credit =Decision:

Potential credit is calculated by deducting the first mortgage balance from the percentage of…

Answered: Michelle Heaster is thinking about…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Michelle Heaster is thinking about building an addition on her home. recently appraised at $154,000, and the balance on her existing first n $88,600. If Michelle's bank is willing to loan up to 70% of the appraise have enough equity in the house to finance a $25,000 addition?