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Pavel [41]
3 years ago
8

You have a car that is valued at $12,000. The balance that you owe on the car loan is $7,000. You lose your job and can not affo

rd to make payments on your loan so you sell the car for $9,000 and pay off the loan. Explain how your net worth is affected by your actions.
Mathematics
2 answers:
MArishka [77]3 years ago
7 0
As a result of such situation, you have reduced your net worth. Before selling the car, your net worth is $12,000-$7,000=$5,000. After selling the car and paying off the loan, it’s $2,000. As you can see it reduced $3,000. Hope this answers the question. Have a nice day.

kupik [55]3 years ago
5 0

Answer:

$2000

Step-by-step explanation:

The net worth of someone is defined as the difference of the assets you own and the debt you owe. The value of the car is $12000 and you sell it for $9000. The amount of money you owe on the care is $7000 and this is considered a debt. Therefore the total net worth is:

9000-7000=2000

The reason for this, is that you have de-valued the car from $12000 to $9000. This will decrease your net worth by:

12000-9000=3000

So instead of your net worh being $5000 it is now $2000.

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