Friday May 16 Scribe Post

Friday in class we kept looking at Net Worth since we ran out of time last class. Mr. K again explained the different catagories of assests and liabilities there are. We continued on from there by looking at how to calculate your debt/equity ratio which shows how your debts compare to your net worth.




The Total Liabilities for the formula includes all short and long-term debts except for your mortgage as shown in the formula you must subtract from the total liabilities before you divide.



Mr. K also showed us a Net Worth spreadsheet to calculate you debt/equity ratio and Net Worth at the same time where you just type in all the types of assests and liabilities you have in there catagory.


Link: http://tinyurl.com/4x8exe








So after that we did a question on mona wanting to do some extensive house renovations. We used this spredsheet to calculate her debt/equity ratio and net worth in order to see if she was able to get the loan.




We find her debt/equity ratio to come up to 20% but if mona was to get a $15000 loan it would rise up to 51% which means the bank will probably not give her the loan since it is over 50%.

These are 3 tips to raise one's net worth:

1. Get higher rates of return on your investments.
2. Reduce your debts. Remember the more extra money you put on your payments you make on your debts the faster they will reduce.
3. Save more on a regular basis. Save at least 10% of your income. Save before you spend.

Next Scribe: David-san

Thursday May 15 Scribe Post

So Thursday in class we had a short 3 question quiz that we later went over and corrected:

Question 1 was on emily wishing to obtain a new car. There were 2 options in this question for emily to buy her car, and you have to calculate witch option will cost emily the least.

In question 2 we had to calculate how much a farmers $60000 tractor would be worth after 6 years, at a 8% depreciation rate

per year.

The 3rd question was on a investment of $500 at the beginning of every month, since the payment is at the beginning of each month you have to change PMT from END to BEGIN ( shown in the picture on the left) .

We also went over the homework from the day before with two questions on Mr. T's family moving into another house where we had to find the total additional costs of moving. And Ms. Jonhston buying a home where we had to find if a 20 or 15-year mortgage would be better for her.

We also started learning about net worth(equity) which is the difference between assests and liabilities.

Net Worth = Assests - Liabilities

Assests are everythin of value that you own, and liabilities being any debt you owe.

We learned about the 3 catagories of assests there are: Liquid Assests, Semi-Liquid Assests, and Non-Liquid Assests

And 2 types of Liabilities: Short Term Debts, and Long-Term Debts.