Question

Sample Household Assets
Assets	Value
Cash	$500
Savings Account	$4,800
IRA Account	$6,500
Current Value of Stocks	$5,000
Life Insurance	$0
Value of Home	$125,000
Other Real Estate	$0
Automobile	$6,400
Personal Property	$3,900
Other Assets	$0

1. What is the total amount of assets for this household?

2. What percentage of these assets is accounted for by the value of the home? Round off to the nearest whole number. Review this list of household liabilities to answer the questions below. Sample Household Liabilities Liabilities Amount Home Mortgage $113,000 Student Loan $8,000 Auto Loan $3,300 Credit Card $4,500 Personal Loan $2,500

3. What is the total amount of liabilities for this household?

4. What percentage of these liabilities is accounted for by the value of the home mortgage? Round off to the nearest whole number.

5a. Using the terms below, explain how to calculate the net worth of this household. N = Net Worth A = Assets L = Liabilities

5b. Perform the calculation and enter the answer below.

Answer 1

1.

Compute the total assets for the household, using the equation as shown below:

Total assets = Cash + Saving account + IRA account + Stock value + Home + Automobile + Personal property + Other assets

                    = $500 + $4,800 + $6,500 + $5,000 + $125,000 + $6,400 + $3,900

                    = $152,100

Hence, the value of total assets is $152,100.        

2.

Compute the percentage of total assets with home, using the equation as shown below:

Percentage = Value of home/ Total assets

                   = $125,000/ $152,100

                   = 82.18277449%

Hence, the percentage of total assets with home is 82.18277449%.

3.

Compute the total liabilities, using the equation as shown below:

Total liabilities = Home loan + Student loan + Auto loan + Credit card + Personal loan

                         = $113,000 + $8,000 + $3,300 + $4,500 + $2,500

                         = $131,300

Hence, the total liabilities is $131,300.

4.

Compute the percentage of total liabilities with the home loan, using the equation as shown below:

Percentage = Home mortgage/ Total liabilities

                   = $113,000/ $131,300

                   = 86.062452399%

Hence, the percentage of total liabilities with the home mortgage is 86.062452399%.