Question

The Roth family has liquid assets of $10,000, use assets of $150,000 and investment assets of $34,000. They also have liabilities totaling $108,000. If their total liabilities increase by $7,000 over the next year, by how much would the Roth family need to increase their assets in order to have a net worth of $100,000? a. $7,000 b. $14,000 c. $21,000 d. $28,000

Answer 1

Answer:

C. $ 21,000

Step-by-step explanation:

Given,

Total assets = $10,000 + $150,000 + $34,000 = $ 194,000,

Total present liabilities = $108,000,

After increasing liabilities by $ 7,000,

New liabilities = $108,000 + $ 7,000 = $ 115,000,

Let family need to increase their assets by x dollars in order to have a net worth of $100,000,

∵ Net worth = Assets - Liabilities

⇒ 100,000 = 194,000 + x - 115,000

⇒ 100,000 = 79000 + x

⇒ x = 100,000 - 79000 = 21000

Hence, OPTION C would be correct.

Answer 2

Answer:

C. $ 21,000

Step-by-step explanation: