Chapter P, Problem 28E

Equity in a Home When you purchase a home by securing a mortgage, the total paid toward the principal is your equity in the home. (Technically, the lending agency calculates your equity by subtracting the amount you still owe on your mortgage from the current value of your home, which may be higher or lower than your principal.) Assume that your mortgage is for $\$\mathrm{350,\; 000}$ at a monthly rate of $0.007$ as a decimal and that the term of the mortgage is $30$ years. Then your equity after $k$ monthly payments is

$\mathrm{350,\; 000}\times \frac{{1.007}^k-1}{{1.007}^{360}-1}$ dollars.

Calculate the equity in your home after $10$ years.