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Melanie’s house is worth $125,000, but she still owes $78,422 on her mortgage. She has $21,236 in a savings account and has $9477 in credit card debt. She owes $6131 to the credit union and figures that her cars and other household items are worth a total of $15,000. What is Melanie’s net worth?

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Dec 12, 2010
Net Worth - Word Problem
by: Staff

The question:


Melanie’s house is worth $125,000, but she still owes $78,422 on her mortgage.

She has $21,236 in a savings account and has $9477 in credit card debt.

She owes $6131 to the credit union and figures that her cars and other household items are worth a total of $15,000.

What is Melanie’s net worth?


The answer:

Let’s start with the definition of net worth

Net Worth = Total Assets – Total Liabilities


1. Total Assets: Add up the dollar value of all of Melanie’s assets

2. Total Liabilities: Add up the dollar value of all of Melanie’s liabilities

3. Net Worth: Compute Melanie’s Net Worth by subtracting her Total Liabilities from her Total Assets


Melanie’s Total Assets:

House: $125,000

Savings: $21,236

Other Assets (cars & household items): $15,000

Total Assets = 125,000 + 21,236 + 15,000 = $161,236


Melanie’s Total Liabilities:

Mortgage on House: $78,422

Credit Card Debt: $9,477

Credit Union Debt: $6,131

Total Liabilities = 78,422 + 9,477 + 6,131 = $94,030


Melanie’s Net Worth:

Net Worth = Total Assets – Total Liabilities

= $161,236 – $94,030

= $67,206


The final answer is: Melanie’s Net Worth = $67,206


For your information, there is a free net worth calculator you can use on the internet:


http://cgi.money.cnn.com/tools/networth/networth.html



Thanks for writing.


Staff
www.solving-math-problems.com


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