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 ______.

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 ______.

Quizplus · Accepted Answer

Taylor's wealth is calculated as total assets minus total liabilities. Initially, her wealth is $111,000. If she puts the $10,000 bonus toward her mortgage, her liabilities decrease by $10,000, increasing her wealth to $121,000. If she puts the bonus in her checking account, her assets increase by $10,000, also increasing her wealth to $121,000.

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