Question

Julio has a house worth $220,000. He has a $175,000 mortgage. Julio says that in this situation, his asset is really only $45,000. Which statement explains whether Julio is correct?

A. Julio is correct because the $45,000 equity in the house is the real asset.

B. Julio is correct because he can pay $45,000 and have no more liabilities.

C. Julio is not correct because the same item cannot represent both an asset and a liability.

D. Julio is not correct because the house cannot be worth more than the mortgage.

Answer 1

A.

He owes 175000, but the house is worth 220000
Equity (or an asset) is equal to how much something is worth minus how much you still owe

220000-175000 = 45000

Answer 2

The statement that explains whether Julio is correct is: A .Julio is correct because the $45,000 equity in the house is the real asset.

What is asset?

Asset is anything that add value to you or things that are valuable. Example of assets are:

• Building

• Equipment

• Land etc

Real asset=House worth-- Mortgage

Real asset=$220,000-$175,000

Real asset=$45,000

Based on the information given we are told the asset was only $45,000 which means that the $45,000 equity in the house is the real asset.

Inconclusion the statement that explains whether Julio is correct is: A .Julio is correct because the $45,000 equity in the house is the real asset.

Learn more about assets here:https://brainly.com/question/25821437