Estimating Net Worth. Anna has just received a gift of $770 for her graduation,

Question

Estimating Net Worth. Anna has just received a gift of $770 for her graduation, which increased her net worth by $770. If she uses the money to purchase a stereo, how will her net worth be affected? If she invests the $770 at 6 percent interest per year, what will it be worth in one year? If she uses the money to purchase a stereo, how will her net worth be affected? (Select the best answer below.) A. Anna?s net worth will decrease when she spends the money to purchase the stereo. B. Buying a stereo would not change Anna?s net worth as she would be exchanging one asset for another.

Explanation / Answer

Answer is option B- It will not change her net worth

FV= amountx(1+i)^n

therefore,

770*1.06= $816.2

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