In: Economics
Lori is a student who teaches golf on the weekend and in a year
earns $30,000 after paying her taxes.
At the beginning of 2016 , Lori owned $2,500 worth of books,
DVDs, and golf clubs and she had $3,000 in a savings account at
the bank.
During 2016 , the interest on her savings account was $150 and
she spent a total of $ 20,000 on consumption goods and services.
The market value of her books, DVDs, and golf clubs did not
change.
How much did Lori save in 2016 ? What is her wealth at the end
of2016 ?
In 2016 , Lori saved $ HOW MUCH?
Lori's wealth at the end of 2016 is $ HOW MUCH
Lori's saving is difference between the disposable income and consumption expenditure.
Disposable income = Income - taxes + inetrest earn.
Disposable income = $30,000 + $150
Disposable income = $30,150
Saving = Disposable income - Consumption expenditure
Saving = $30,150 - $20,000
Saving = $10,150
Lori save $10.300 in 2016
(b) Lori wealth at the end of 2016 = Wealth in the begining of 2016 + Saving made during 2016
Wealth in the begining of 2016 = Value of books, DVDs, golf
clubs + money in saving account.
Wealth in the begining of 2016 = $2,500 + $3,000 = $5,500
Lori wealth at the end of 2016 = $5,500 + $10,150
Lori weath at the end of 2016 = $15,650