Explain why the return on your payment changes

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Reference no: EM131962277

Suppose you purchase a new home for $150,000 making a down payment of 30% and taking out a mortgage on the balance.

a) What is the return on your investment in your home if one year later the price of the home increases by 20%?

b) What is your return if the price of the home decreases by 20%?

c) How would your answers to parts a) and b) change if your down payment is only 15%? Explain why the return on your payment changes with the size of your down payment.

Reference no: EM131962277

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