A property with a first mortgage of $170,000 and a second mortgage of $20,000 is sold for $195,000. How much does the holder of the third mortgage receive?

To determine how much the holder of the third mortgage receives, it's important to analyze the situation based on the sale price of the property and the existing mortgages.

The property sold for $195,000, and there are two outstanding mortgages: a first mortgage of $170,000 and a second mortgage of $20,000. When the property is sold, the proceeds must first cover the senior debts (the first and second mortgages) before any cash can be disbursed to junior debts (like the third mortgage).

First, calculate the total amount of the first and second mortgages:

• First mortgage: $170,000

• Second mortgage: $20,000

• Total mortgages: $170,000 + $20,000 = $190,000

Now, subtract this total from the sale price of the property:

• Sale price: $195,000

• Total mortgages: $190,000

• Amount remaining after first and second mortgages: $195,000 - $190,000 = $5,000

This remaining amount represents the surplus available after satisfying the first and second mortgages. Therefore, the holder of the third mortgage will receive this remaining amount of $5,000.

Thus, the holder of the third mortgage