Taylor has the following assets and liabilities: $$\begin{array} { l l r }
\text { Two cars } & \$ 15,000 \
\text { House } & \$ 400,000 \
\text { Mortgage } & \$ 300,000 \
\text { Cash } & \$ 1,000 \
\text { Car loans } & \$ 5,000 \
\text { Checking account balance } & \$ 3,000 \
\text { Credit card balance } & \$ 3,000
\end{array}$$ Suppose that Taylor receives a $10,000 bonus from her employer. If she puts that money toward her mortgage, her wealth would ______; if she puts that money in her checking account, her wealth would ______.
A) increase to $121,000; decrease to $101,000
B) increase to $115,000; decrease to $95,000
C) increase to $121,000; increase to $121,000
D) increase to $115,000; increase to $115,000

Question

Taylor has the following assets and liabilities: $$\begin{array} { l l r } 
\text { Two cars } & \$ 15,000 \
\text { House } & \$ 400,000 \
\text { Mortgage } & \$ 300,000 \
\text { Cash } & \$ 1,000 \
\text { Car loans } & \$  5,000 \
\text { Checking account balance } & \$ 3,000 \
\text { Credit card balance } & \$ 3,000
\end{array}$$ Suppose that Taylor receives a $10,000 bonus from her employer. If she puts that money toward her mortgage, her wealth would ______; if she puts that money in her checking account, her wealth would ______.
A) increase to $121,000; decrease to $101,000
B) increase to $115,000; decrease to $95,000
C) increase to $121,000; increase to $121,000
D) increase to $115,000; increase to $115,000

Quizplus · Accepted Answer

If Taylor puts the $10,000 bonus toward her mortgage, her mortgage balance would decrease to $290,000, and her wealth would increase to $121,000. If she puts the $10,000 bonus in her checking account, her wealth would increase to $121,000.

Taylor Has the Following Assets and Liabilities Suppose That Taylor Receives a $10,000 Bonus from Her Employer