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UNIT 1 — MILESTONE 1
1
Lucie has $6,000 in her savings account, $1,400 in her checking account, and $30,000 in a long-term investment such as a brokerage account. She owns a house worth
$150,000 and cars that are valued at $25,000. She owes $4,000 in credit card debt and $120,000 as mortgage. Lucie has an outstanding payment of $60,000 on her student
and car loans. She has a retirement plan worth $75,000.
Using the given information, calculate Lucie's net worth, current ratio, and debt ratio.
Lucie has a net worth of −$106,600. Her current ratio is 1.5 and debt ratio is 15%.
Lucie has a net worth of −$106,600. Her current ratio is 9.35 and current ratio is 158%.
Lucie has a net worth of $103,400. Her current ratio is 1.85 and debt ratio is 64%.
Lucie has a net worth of −$103,400. Her current ratio is 0.5 and her debt ratio is 156%.
Score 10/12
You passed this Milestone
10 questions were answered correctly .
2 questions were answered incorrectly .

The formulas that can be used to calculate net worth, current ratio, and debt ratio are as follows:
Net worth = Assets − Liabilities = $287,400 − $184,000
Net worth = $103,400
Current ratio = Monetary assets / Current liabilities
Current ratio = $7,400 / $4,000 = 1.85
Debt ratio = Total liabilities / Total assets * 100
Debt ratio = ($184,000 / $287,400) * 100 = 64%
CONCEPT
Balance Sheets
2
Preethi plans to buy a house within the next 5 years. At present, she has total savings of $60,000. The median house price in her state is nearly $100,000.
Which of the following investment options will Preethi most likely benefit from?
RATIONALE
Preethi should invest $60,000 at 10% interest for a period of 5 years. To calculate the most beneficial investment from these options, we will use the formula to calculate the
future value of the invested money at different interest rates and different periods.

By substituting the numbers in the equation, we get
Therefore, this investment is the most beneficial for Preethi.