Question

Suppose that David's only assets are an automobile worth $10,000 and a checking account with a $5,000 balance. His only liabilities are a student loan balance of $12,000 and a balance of $9,000 on his car loan. What is his net worth?a) 10,000

b) 9,000
c) 5,000
d) 12,000
e) none of the above

Answer 1

e) none of the above

Step-by-step explanation:

The net worth of the David's can be determined through the following mentioned formula:

Net worth=Total assets- total liabilities

In the given question

Total assets=automobile+ checking account balance

=$10,000+$5,000

=$15,000

Total liabilities=student loan balance+car loan

=$12,000+$9,000

=$21,000

Net worth=$15,000-$21,000=($6,000)

So the answer based on the above calculations are e) none of the above