Chapter 6.3, Problem 8EGDQ

Explanation of Solution

Definition of Rich:

The term “rich” means having enough money to securely maintaining one’s life or having lot of assets are considered as one’s wealth.

Classifying someone as rich:

• Different people can have different opinions about who is “rich”? But, becoming a rich is one of our personal economic goals, it’s important to know the exact means of wealth to judge or classifies someone is rich.
• Defining wealth in terms of amount- either for salary or for net value or capital.
  • The given scenario states that, people who earn $500,000 per year are considered as rich.
  • Similarly, partners who earns themselves in the range $1M-$5M every six months are consider as rich...