Richard owns a house that has a value of $115,585 and a motorcycle that has a value of $696. He owes $15,474 on his car loan. Using these assets and liabilities, what is Richard's net worth?

Answer 1

First let’s define what net worth is. Net worth is the difference between Richard’s assets (items of value that he could sell) and his liabilities (money he owns or loans).

So, give the information in the problem we know that Richard’s assets are his house and his motorcycle and his liability is his car loan.

If we substitute the values into the equation for net worth we get:

Net Worth = (115,585 + 696) - (15,474) = $100,807

So Richard’s Net Worth is $100,807.

Answer 2

First, you have to know that an asset is property owned and a liability is a debt or financial obligation. The difference between these two is the net worth.

You add up the assets, the house and the motorcycle. $115,585 + $696 and you get the total which is-.

$116,281 Then you subtract the liability, the car loan, and get-

-$ 15,474

$100,807= net worth

Answer 3

To find net worth add the assets and subtract the liabilities.

$115,585 + $696 = $122, 281 = gross or total assets

Subtract $15,474 = $106,807 = net assets = net worth

But that assumes the car has zero value, which is possible, but unlikely.

the car is also an asset. Or maybe the "car" loan is the loan on the

motorcycle? Also, it's a little ambiguous whether he owes

$15,474 as the principal on the car loan or is it the total payments

which include interest.

Assuming away all those problems, the answer is $106,807 as to Richard's net worth.

Just add the two assets and subtract the liability.

Answer 4

Net Worth = Total Assets - Total Liabilities

Assets = house + motorcycle = ($115,585 + $696) = $116,281

Liabilities = car loan = $15,474

Net Worth = $116,281 - $15,474 = $100,807