Net Worth and Purchasing Power Sem 2 1.03

Net Worth and Purchasing Power

These are the 5 richest people in America. Notice their Net Worth.

Net Worth

Definitions

Asset: anything you own; cash on hand; savings

Liability: anything you owe e.g. mortgage; loans; medical debt, etc

Net Worth: Your assets - liabilities

Categorize

Options (16)

House

Car

Boat

Motorcycle

Jewelry

Artwork

Electronics

Furniture

Credit card debt

Student loans

Mortgage

Personal loans

Auto loans

Medical bills

Taxes owed

Unpaid rent

Organize these options into the right categories

Asset

Liability

This is an example of "Nancy's" Net Worth.​

Finding Net Worth

The increase of prices over time

Inflation

Match

Match the following

• Asset

• Liability

• Net Worth

• Inflation

Anything you own

Anything you owe

Assets minus liabilities

General increase in prices

• Anything you own

• Anything you owe

• Assets minus liabilities

• General increase in prices

​Inflation Rate is the percentage of how much price increases over time. For example:

Fill in the Blanks

Find the inflation rate:

A dozen eggs cost $1.99 five years ago. Today they cost $3.79.

Remember to convert to a percent!

Fill in the Blanks

Let's do another one! Find the inflation rate:

A pack of pencils cost $.99 three years ago. Today they cost $2.19.

Remember to convert to a percent!

Purchasing Power

Purchasing Power is how much someone's net income is really worth.

We find this by multiplying the net income by the inflation rate and subtracting that number from the net income:

Purchasing Power = Net Income - (Net Income)(Inflation Rate)

Drag and Drop

Choose which ones are LIABILITIES​

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Drag these tiles and drop them in the correct blank above

Lunch charge

CD Player

Set of valuable baseball cards

Savings account

Ordered a class ring

Borrowed money from parents

Fill in the Blanks

What is your Net Worth?

Net Worth = Assets - Liabilities

Fill in the Blanks

How much of your assets are READILY AVAILABLE FUNDS? (money you can spend right now without having to sell anything)

Categorize

Options (16)

Checking and Savings

$2178

Mortgage

$50190

Auto Loan

$5670

Credit Card

$1962

House

$123000

Furniture and Appliances

$13590

Certified Art Collection

$1278

College Loans

$12598

Organize these options into the right categories

Assets

Value of Assets

Liabilities

Value of Liabilities

Fill in the Blanks

If Sy has a total net worth of $568 and liabilities of $482, what are his total assets?

Net worth = Assets - Liabilities

Poll

I understand the difference between NET WORTH, ASSETS, LIABILITIES, and INFLATION

• ABSOLUTELY!

• I think so?

• Not really...

• HELP!