Question

You and your new Australian bride Matilda, are applying for a loan and are required to submit a balance sheet with your net worth. You own a 2008 Toyota Camry that you bought last month for $9,995. The Kelly Blue Book value for this car is $13,995. You owe $8,150 on the car loan for the Camry. You pay off your Visa credit card every month and have not paid any credit card interest this year. The current Visa credit card balance is $3,522, and the next statement is due in 15 days. You have a student loan balance of $6,500. You presently have $425 in your checking account and $1,540 in your savings account. You own 100 shares of IBM stock that you purchased for $85.50 per share. One share of IBM is now selling for $158.42. You own computers and other electronics that you purchased for $4,100 but could probably sell today on E-bay for $1,800. Your gross income is $80,000 per year. What is your current net worth? (See WB Ch. 2 Example 2.3)

Answer 1

Answer:

$15,430

Explanation:

A person's or a couple's net worth is the difference between the value of the total assets that they possess and their total debt.

Couple's assets:

• Toyota Camry $13,995
• checking account balance $425
• savings account balance $1,540
• IBM stock $15,842
• electronics $1,800
• total assets $33,602

Couple's debt:

• car loan $8,150
• credit card balance $3,522
• student loan balance $6,500
• total debts $18,172

The couple's net worth = $33,602 - $18,172 = $15,430