If Rosetta sells her house and pays off the mortgage, how much should she receive (assuming there are no other costs associated with selling the house)?
A. $42,000
B. $50,000
C. $52,000
D. $60,000
Answer (2)
Rosetta's house is valued at $150,000, and her mortgage is $100,000.
Subtract the mortgage from the house value: $150,000 - $100,000.
Calculate the difference: $50,000.
Rosetta receives $50 , 000 .
Explanation
Understanding the Problem Rosetta's house is an asset valued at $150,000. She has a mortgage liability of $100,000 on the house. The question asks how much money Rosetta will receive if she sells the house and pays off the mortgage. We need to subtract the mortgage amount from the house value to find the amount she receives.
Calculating the Amount Received To find out how much Rosetta receives, we subtract the mortgage amount from the house value:
House value - Mortgage amount = Amount received
$150,000 - $100,000 = Amount received
Determining the Final Amount Performing the subtraction:
$150 , 000 − $100 , 000 = $50 , 000
Therefore, Rosetta should receive $50,000 after selling her house and paying off the mortgage.
Examples
Understanding balance sheets and asset liquidation is crucial in personal finance. For example, if you decide to sell an asset like a car or a house to pay off a debt, this calculation helps you determine how much money you will have left after settling the debt. This ensures you can plan your finances effectively and make informed decisions about managing your assets and liabilities. Knowing how to calculate the net proceeds from selling an asset helps in making sound financial decisions.
Rosetta should receive $50,000 after selling her house and paying off her mortgage. This is calculated by subtracting the mortgage balance of $100,000 from the house value of $150,000. Therefore, the correct answer is B. $50,000.
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