chapter 3

Current liabilities differ from long-term liabilities based on:

. when the debt is due.

Assume the following as monthly amounts:Gross Salary: $4,000Take Home Pay: $2,600Savings: $450Credit Card Payments: $500What would be your savings ratio?

11.25% 450/4000

Monica has determined that the value of her liquid assets is $4,500, the value of her real estate is $128,000, the value of her personal possessions is $62,000 and the value of her investment assets is $73,000. She has also determined the value of her current liabilities is $7,500 and the value of her long term liabilities is $98,000. What is Jamie's net worth?

162,000

A savings amount of $5,000 on deposit for 8 years at 4 percent interest (compounded annually) would earn about ______ in interest

1840

Phoebe has determined the following information about her own financial situation. Her checking account is worth $850 and her savings account is worth $1,200. She owns her own home that has a market value of $98,000. She has furniture and appliances worth $12,000 and a home computer and laptop worth $3,300. She has a car worth $12,500. She has recently purchased a 2 year certificate of deposit worth $5,500 and she has a retirement account worth $38,550. What is the value of her liquid assets?

2,050

Which of the following situations is a person who could be insolvent?

Assets $40,000; liabilities $45,000

The Lopez family budgets $420 a month for food. Last month they spent $413, which creates

a budget surplus of $7.

0. A budget deficit would result when a person's or family's:

actual expenses are greater than planned expenses.

If expenses for a month are greater than income, an increase in net worth will result.

false

Current liabilities are amounts that must be paid within a short period of time, usually less than a year.

true