Question

Theresa owes $9,000 on her car loan. If the value of her car is $15,000, what is her equity in the car?

Answer 1

Answer:

6000

* I took the test and the answer was 6000 :)

Answer 2

Hi there

Since Theresa owes $9,000 this amount enters in liability

the value of her car which is 15000
This amount enters in assets

So to find the equity in the car
Owners equity=assets-liability
Owners equity=15000-9000=6000

6000 is the equity in the car

Good luck!