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Personal Finance 1st Edition by Jack R. Kapoor
Edition 1ISBN: 1308231393Personal Finance 1st Edition by Jack R. Kapoor
Edition 1ISBN: 1308231393Calculating Net Worth and Determining a Safe Credit Limit.
a. Calculate your net worth based on your present assets and liabilities.
b. Refer to your net worth statement and determine your safe credit limit. Use the debt payments–to–income and debt-to-equity formulas. (Obj. 3)
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Step 1 of 3
a. Net worth:
Record all your assets (financial and tangible assets) with the values.
The sum of all of those values is the total value of your assets. Next, consider all the liabilities, which should be everything you owe.
The difference between your assets and your liabilities is your net worth.
| Asset | Value | Liabilities | Value |
| Cash | $3,000 | Remaining mortgage balance | $150,000 |
| Investments | $1,500 | Credit card balances | $10,000 |
| Home value | $200,000 | Personal loans | $5,000 |
| Automobile value | $20,000 | Unpaid taxes | $1,000 |
| Other Assets | $1,000 | ||
| Total Assets | $225,500 | Total Liabilities | $16,6000 |
Substitute the values in the formula:
Net Worth is $59,000
Step 2 of 3
Step 3 of 3
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