Author Question: Suppose you buy a house for 250,000. One year later, the market price for the house has fallen to ... (Read 113 times)

mpobi80 · **on:** Jun 29, 2018

Suppose you buy a house for 250,000. One year later, the market price for the house has fallen to 200,000.

What is the return on your investment in the house if you made a down payment of 10 percent and took out a mortgage loan for the other 90 percent?

Question 2

The primary purpose of patents and copyrights is to

A) protect firms from being taken advantage of by competing firms.
B) protect domestic firms from foreign competition.
C) provide owners with large profit forever.
D) encourage the expenditure of funds on research and development to create new products.

ky860224 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

The market price has fallen by 50,000, so with a 10 percent down payment, your return on investment is -50,000 divided by the 10 percent down payment of 25,000. or -50,000/ 25,000 = -2, which means you lost 200 percent.

Answer to Question 2

D