Answer:
The maximum amount he can borrow is <u>$126,800</u>.
Explanation:
Given:
Michael purchased a home for $380,000.
Market value of home = $336,000.
Current mortgage balance = $142,000.
Rate of borrowing at the market value = 80%.
Now, to find the maximum of amount Michael can borrow.
So, we find first the maximum mortgage amount:
<u><em>Maximum mortgage amount</em></u><u> </u><u><em>= 80% of market value.</em></u>



<em>As, he still owes $142,000 mortgage in his home.</em>
Now, to get the maximum amount he can borrow we use formula:
<em><u>Maximum amount he can borrow = Maximum mortgage amount - Current mortgage balance.</u></em>
Maximum amount he can borrow 
Maximum amount he can borrow 
Therefore, the maximum amount he can borrow is $126,800.