Assets Value
Car $24,728
Savings account $3,589
Savings for retirement $15,600
Total Assets
Liabilities Balance Owed
Car loan $3,000
Credit card balance $762
Total Liabilities
Net Worth
Reena wants to put together a net worth statement to share with her bank as she applies for a small loan. Showing your work for each step, construct a net worth statement based on the information she has gathered in the table. What does this mean for Reena’s chances of getting a loan?
(2 points)
To construct a net worth statement, we need to calculate the total assets, total liabilities, and net worth.
Total assets = Value of car + savings account + savings for retirement
Total assets = $24,728 + $3,589 + $15,600
Total assets = $43,917
Total liabilities = Balance owed on car loan + credit card balance
Total liabilities = $3,000 + $762
Total liabilities = $3,762
Net worth = Total assets - Total liabilities
Net worth = $43,917 - $3,762
Net worth = $40,155
Reena's chances of getting a loan depend on various factors, including her net worth. A higher net worth generally indicates a stronger financial position and lowers the risk for lenders. In this case, Reena's net worth is $40,155, which could potentially improve her chances of getting a loan. However, the bank will also consider other factors such as income, credit score, and the purpose of the loan.