PERSONAL FINANCE
8th Edition
ISBN: 9780134730981
Author: KEOWN
Publisher: PEARSON
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Question
Chapter 2, Problem 1PA
Summary Introduction
To determine:
Net worth and affect of L’s age on net worth.
Introduction:
Net worth is that part of the assets that exceed liabilities. It is calculated by subtracting borrowing or debt from total assets.
Expert Solution & Answer

Explanation of Solution
Personal
Assets (What You Own) | ||
Particulars | Amount ($) | |
A | House | 90,000 |
B | Automobile | 20,000 |
C | Furniture | 10,000 |
D | Total Assets (add lines A-C) | 120,000 |
Liabilities or Debt (What You Owe) | ||
E | Current Bills | 150 |
F | Housing Loans | 50,000 |
G | Automobile Loans | 4,000 |
H | Total Liabilities (add lines E-G) | 54,150 |
Net Worth | ||
D | Total Assets | 120,000 |
H | Less: Total Debt | 54,150 |
I | Equals: Net Worth(D-H) | 65,850 |
Table (1)
Net worth of L is $65,850.
L’s age will not have any effect on his net worth.
Conclusion
Hence, the total net worth of L is $65,850.
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