Assets Checking and Savings 275RareBaseballCards210 Check for work done
The Correct Answer and Explanation is:
The correct answer is $39.
To find Karen’s net worth, you need to use the fundamental financial formula: Net Worth = Total Assets – Total Liabilities. This calculation gives a snapshot of an individual’s financial position.
First, we must calculate the total value of her assets. Assets are resources with economic value that an individual owns with the expectation that they will provide a future benefit. Based on the provided table, Karen’s assets are:
- Checking and Savings: $275
- Rare Baseball Cards: $210
- Check for work done for a neighbor: $19
To find the total assets, we add these amounts together:
$275 + $210 + $19 = $504.
So, Karen’s total assets amount to $504.
Next, we must calculate her total liabilities. Liabilities are a person’s financial obligations or debts. In simple terms, it is money that is owed to others. According to the table, Karen’s liabilities are:
- Owed on graduation items: $415
- Borrowed from mom: $50
To find the total liabilities, we sum these debts:
$415 + $50 = $465.
Karen’s total liabilities are $465.
Finally, to determine her net worth, we subtract her total liabilities from her total assets:
Net Worth = $504 (Total Assets) – $465 (Total Liabilities) = $39.
Therefore, Karen’s net worth is $39. This value represents the amount of money she would have left if she sold all her assets and paid off all her debts.
