Question

Becky’s assets include a car worth $8,000; a laptop computer worth $600; $3,750 in savings; and $200 cash. Her liabilities include a $3,700 tuition bill for one semester; $875 balance on her credit card; a $60 cell phone bill; and $50 she borrowed from a friend. What is her current net worth? Is it positive or negative?

Answer 1

$7,865

Explanation:

To calculate Becky's current net worth, you need to subtract her total liabilities from her total assets.

Assets:

Car: $8,000

Laptop computer: $600

Savings: $3,750

Cash: $200

Total Assets = $8,000 + $600 + $3,750 + $200 = $12,550

Liabilities:

Tuition bill: $3,700

Credit card balance: $875

Cell phone bill: $60

Borrowed from a friend: $50

Total Liabilities = $3,700 + $875 + $60 + $50 = $4,685

Now, calculate her net worth by subtracting her total liabilities from her total assets:

Net Worth = Total Assets - Total Liabilities

Net Worth = $12,550 - $4,685 = $7,865

Becky's current net worth is $7,865, and it is positive, indicating that her assets exceed her liabilities.