# set up a word problem

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