Amala listed her assets and liabilities. Credit Card Balance:
2,200 Student Loan:
2,500 Stocks: $1,200 What is the total of Amala’s liabilities?
The Correct Answer and Explanation is:
Amala’s liabilities are the debts or financial obligations that she needs to repay. Based on the information provided, her liabilities include:
- Credit Card Balance: $2,200
- Student Loan: $2,500
To find the total of Amala’s liabilities, we simply add these amounts together:Total Liabilities=Credit Card Balance+Student Loan\text{Total Liabilities} = \text{Credit Card Balance} + \text{Student Loan}Total Liabilities=Credit Card Balance+Student LoanTotal Liabilities=2,200+2,500=4,700\text{Total Liabilities} = 2,200 + 2,500 = 4,700Total Liabilities=2,200+2,500=4,700
Therefore, Amala’s total liabilities amount to $4,700.
Explanation:
Liabilities refer to financial obligations that must be paid back over time. In this case, Amala has two liabilities listed:
- Credit Card Balance: A credit card balance is a revolving debt that accumulates interest if not paid off in full each month. The $2,200 balance represents the amount Amala owes to the credit card company.
- Student Loan: A student loan is typically a longer-term debt used to pay for education. Amala owes $2,500 for this loan.
When calculating total liabilities, we sum the amounts of all outstanding debts. This helps Amala understand her financial obligations and plan how she might pay them off over time. In this case, the sum of $2,200 for the credit card balance and $2,500 for the student loan gives a total liability of $4,700.
By understanding the total liabilities, Amala can also evaluate her overall financial situation, which may include assets, income, and expenses, to determine how she can manage or reduce these liabilities.
