Answer: $16,400
Explanation:
From the question, we are informed that Sheldon has a home valued at 108000 and an outstanding mortgage of 70000 and that his lender is willing to provide a home equity loan of up to 80% of market value.
Since the lender will provide the home equity loan of up to 80%. This will be:
= 80% × $108,000
= 0.8 × $108,000
= $86,400
We are also informed that Sheldon has $70,000 outstanding mortgage. Therefore, the amount that Sheldon can borrow by using the home equity loan will be:
= $86,400 - $70,000
= $16,400
