You are selling your house and you think it will sell for $340,000. You talk to a real estate agent who is willing to list your house for $344,900. Her fee is 7%. You currently owe $220,000 on your home.

a. How much will her fee be if you accept an offer for $340,000?

b. Assume that you accept an offer for $340,000. After you pay the real estate agent and pay back the mortgage, how much cash will be available to you?

c. If the buyer wants you to pay closing costs of $4,800: how much cash will be available to you if you accept an offer for $340,000?

d. You decide not to sell your house but to remodel and put on an addition. What is the equity in your house given a $340,000 appraised value?

e. The bank will let you borrow 80% of the appraised value of your house, which appraises at $340,000. What is the maximum home equity loan you can get? Hint: Don't forget to deduct the existing mortgage balance before calculating your answer.