Answers26-27 RPA Financial Math - MA2007 ICTrends in the Marketplace

Net Worth Answers

32 verified answers1 views
1
Free Preview

Which of the following is an example of increasing both current liability and use assets?

A
paying off car loan and investing money in retirement fund
B
paying down mortgage and putting money in savings
C
selling a motorcycle to pay off a debt
D
trading in an old car for a newer car and financing the balance
2
Free Preview

The Roth family has liquid assets of $10,000, use assets of $150,000 and investment assets of $34,000. They also have liabilities totaling $108,000. If their total liabilities increase by $7,000 over the next year, by how much would the Roth family need to increase their assets in order to have a net worth of $100,000?

A
$7,000
B
$14,000
C
$21,000
D
$28,000
3

The Worthingtons love to travel, so when they retired they sold their house and purchased a motor home valued at $165,000. They tow their car, valued at $32,000 behind their motor home when they travel. The Worthingtons have medical bills totaling $1,300 and a balance of $3,000 on credit cards. Since they invested for retirement, the Worthingtons have $200,000 in investments and an additional $20,000 in their savings account. What is the Worthingtons’ net worth?

A
$411,700
B
$412,700
C
$413,700
D
$414,700
4

Mr. Chavez has assets of $250,000 and liabilities of $18,000. He decides to finance the entire amount of the purchase of a car valued at $26,000. Which of the following is true?

A
Mr. Chavez increased his assets.
B
Mr. Chavez increased his net worth.
C
Mr. Chavez increased both his assets and net worth.
D
Mr. Chavez did not increase his assets or his net worth.
5

Which of the following is a liability?

A
bonus paycheck
B
credit card balance
C
investment fund
D
savings account
6

Which of the following modifications to the list of assets and liabilities below would result in a positive net worth?Home owned $105,000.Mortgage owed $100,000.Car valued at $26,000.Car loan of $22,000.Investment fund of $4,500.Savings of $1,500.Credit card balance of $15,000.

A
Lowering mortgage by $1,000.
B
Increasing investment fund by $500.
C
Adding $100 to savings.
D
All of the above.
7

Which of the following modifications to the list of assets and liabilities below would result in a net worth of $100,000?Recreational Vehicle valued at $110,000.Car valued at $27,000.Medical bills totaling $8,700.Loan balance of $80,000.Savings of $5,000.Retirement fund of $50,000.Credit card balance of $2,300.

A
recreational vehicle value decreasing to $100,000
B
borrowing $10,000 more in loans
C
withdrawing $20,000 from the retirement fund
D
adding $1,000 in credit card debt
8

The following table shows the assets and liabilities of the Chang family in 2007 and 2008.20072008home valued at $315,000home valued at $325,000mortgage of $265,000mortgage of $240,000car valued at $10,000car valued at $6,000car loan of $5,000car loan of $1,000savings of $2,000credit card debt of $1,500Based on the table, which of the following is true?

A
From 2007 to 2008, both assets and liabilities decreased.
B
From 2007 to 2008, both assets and liabilities increased.
C
From 2007 to 2008, assets decreased and liabilities increased.
D
From 2007 to 2008, assets increased and liabilities decreased.
9

The following table shows the assets and liabilities of the Chang family in 2007 and 2008.20072008home valued at $315,000home valued at $325,000mortgage of $265,000mortgage of $240,000car valued at $10,000car valued at $6,000car loan of $5,000car loan of $1,000savings of $2,000credit card debt of $1,500Based on the table, which of the following is true?

A
From 2007 to 2008, both assets and liabilities decreased.
B
From 2007 to 2008, both assets and liabilities increased.
C
From 2007 to 2008, assets decreased and liabilities increased.
D
From 2007 to 2008, assets increased and liabilities decreased.
10

What does a negative net worth indicate?

A
Your assets exceed your liabilities.
B
Your assets equal your liabilities.
C
Your liabilities exceed your assets.
D
You have only assets and no liabilities.
11

The Worthingtons love to travel, so when they retired they sold their house and purchased a motor home valued at $165,000. They tow their car, valued at $32,000 behind their motor home when they travel. The Worthingtons have medical bills totaling $1,300 and a balance of $3,000 on credit cards. Since they invested for retirement, the Worthingtons have $200,000 in investments and an additional $20,000 in their savings account. What is the Worthingtons’ net worth?

A
$411,700
B
$412,700
C
$413,700
D
$414,700
12

What does a negative net worth indicate?

A
Your assets exceed your liabilities.
B
Your assets equal your liabilities.
C
Your liabilities exceed your assets.
D
You have only assets and no liabilities.
13

The amount of money in a savings account is an example of which of the following?

A
investment asset
B
liquid asset
C
long term asset
D
use asset
14

Which of the following modifications to the list of assets and liabilities below would result in a positive net worth?Home owned $105,000.Mortgage owed $100,000.Car valued at $26,000.Car loan of $22,000.Investment fund of $4,500.Savings of $1,500.Credit card balance of $15,000.

A
Lowering mortgage by $1,000.
B
Increasing investment fund by $500.
C
Adding $100 to savings.
D
All of the above.
15

Which of the following increases liabilities but not assets?

A
Taking out a loan to buy a new car
B
Taking out a loan to go on vacation
C
Using a credit card to buy a computer
D
Paying off a student loan
16

Over the period of a year, Julie’s net worth decreased. Which of the following could be true?

A
Julie’s assets and liabilities decreased by the same amount.
B
Julie’s assets and liabilities increased by the same amount.
C
Julie’s assets increased by more than her liabilities.
D
Julie’s assets decreased by more than her liabilities.
17

Which of the following could be true if one decreases their long term liability and increases their liquid assets?

A
Paid off credit card balance and added money to savings.
B
Paid off medical bills and invested money.
C
Paid down mortgage and received a cash prize.
D
Paid taxes owed and bought a car.
18

The car owned by a person is part of his or her ____.

A
investment assets
B
liquid assets
C
long term assets
D
use assets
19

The car owned by a person is part of his or her ____.

A
investment assets
B
liquid assets
C
long term assets
D
use assets
20

Which of the following could be true if one decreases their long term liability and increases their liquid assets?

A
Paid off credit card balance and added money to savings.
B
Paid off medical bills and invested money.
C
Paid down mortgage and received a cash prize.
D
Paid taxes owed and bought a car.

Did you find these answers helpful?

More from this Course

Quiz
22 verified answers

Financial Goals

Quiz
19 verified answers

Trends in the Marketplace

Quiz
32 verified answers

Topic Test