Suppose that Cheryl's only assets are an automobile worth $10,000 and a checking account with a $5,000 balance. Her only liabilities are a student loan balance of $2,000 and a balance of $8,000 on her car loan. What is her net worth?

Question

Quizplus · Accepted Answer

Net worth is the difference between assets and liabilities.

Assets = $10,000 (automobile) + $5,000 (checking account balance) = $15,000 
Liabilities = $2,000 (student loan balance) + $8,000 (car loan balance) = $10,000

Net worth = Assets - Liabilities = $15,000 - $10,000 = $5,000. Therefore, the answer is C) $5,000.

Suppose That Cheryl's Only Assets Are an Automobile Worth $10,000