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Ben owns a townhome valued at $195,000, but still owes $120,000 on the loan. Ben has $5,000 in savings and a balance of $1,400 on his credit cards. There is a balance of $20,000 owed on Ben’s car which is valued at $38,000. What is Ben’s net worth? a. $96,600 b. $97,600 c. $99,400 d. $106,600

User Lineage
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Final answer:

Ben's net worth is calculated by adding his home equity, car equity, and savings together and subtracting his credit card debt. His home equity is $75,000, car equity is $18,000, savings account holds $5,000, and he owes $1,400 on his credit card, leading to a net worth of $96,600, which is option (a).

Step-by-step explanation:

To calculate Ben's net worth, we need to subtract his liabilities from his assets.

  • Ben's townhome is worth $195,000, and he still owes $120,000 on it, so his home equity is this difference, which is $75,000.
  • He has $5,000 in savings, which is an asset.
  • Ben has a credit card balance of $1,400, which is a liability.
  • His car is worth $38,000, and Ben owes $20,000 on it, meaning his equity in the car is $18,000.

Now, we sum up the equities and savings and subtract the liabilities:

Net Worth = Home Equity + Car Equity + Savings - Credit Card Debt

Net Worth = $75,000 (home) + $18,000 (car) + $5,000 (savings) - $1,400 (credit card)

Net Worth = $96,600

Therefore, Ben's net worth is $96,600, which corresponds to option (a).

User Quirzo
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