julio has a house worth $220,000. he has a $175,000 mortgage. julio says that in this situation, his asset…

julio has a house worth $220,000. he has a $175,000 mortgage. julio says that in this situation, his asset equity is really only $45,000. which statement explains whether julio is correct?\no julio is correct because the $45,000 equity in the house is the real asset.\no julio is correct because he can pay $45,000 and have no more liabilities.\no julio is not correct because the same item cannot represent both an asset and a liability.\no julio is not correct because the house cannot be worth more than the mortgage.

julio has a house worth $220,000. he has a $175,000 mortgage. julio says that in this situation, his asset equity is really only $45,000. which statement explains whether julio is correct?\no julio is correct because the $45,000 equity in the house is the real asset.\no julio is correct because he can pay $45,000 and have no more liabilities.\no julio is not correct because the same item cannot represent both an asset and a liability.\no julio is not correct because the house cannot be worth more than the mortgage.

Answer

Brief Explanations:

Asset - equity is calculated as the value of the asset minus the liability. Here, the house value ($220,000) is the asset and the mortgage ($175,000) is the liability. So, equity = $220,000 - $175,000 = $45,000. The equity represents the real - value of the asset after accounting for the debt.

Answer:

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