a. 10. (15 points) Suppose the pet groomer takes out a loan to buy the building where the pets are groomed. They buy the building for $200,000 and put 10% down. The building luckily appreciates by 5% over one year. Assuming that the mortgage value is $175,000 after one year, how much equity does the pet groomer have in the building? b. Now, assume that the building decreases in value by 20%. What is the owners equity in the building now? c. Let's assume that the owner holds an adjustable rate mortgage that has a 5% interest rate for 3 years. After three years the interest rate increases to 12%. Why is this risky? a. 10. (15 points) Suppose the pet groomer takes out a loan to buy the building where the pets are groomed. They buy the building for $200,000 and put 10% down. The building luckily appreciates by 5% over one year. Assuming that the mortgage value is $175,000 after one year, how much equity does the pet groomer have in the building? b. Now, assume that the building decreases in value by 20%. What is the owners equity in the building now? c. Let's assume that the owner holds an adjustable rate mortgage that has a 5% interest rate for 3 years. After three years the interest rate increases to 12%. Why is this risky