Question

1. Vaughn has a net worth of $2,500. If Vaughn has a total of $2,000 of liquid

assets, $4,000 of personal possessions, and credit card bills totaling
$1,000, how much does she owe on her student loans? Assume that
Vaughn has no other assets or liabilities.

A. $3,000
B. $1,000
C. $2,000
D. $1,500
E. $2,500

Answer 1

D. $1,500

We can calculate the amount of student loan debt Vaughn has by subtracting her assets from her net worth.

Net worth = $2,500

Assets:

• Liquid assets = $2,000

• Personal possessions = $4,000

• Credit card bills = $-1,000 (negative because it's a liability)

• Total assets = $5,000

• Debt = Net worth - Assets

• Debt = $2,500 - $5,000

• Debt = $-2,500

Since debt can't be negative, we need to make it positive.

Debt = $2,500 (positive)

Therefore, Vaughn owes $1,500 on her student loans.