Which of the following modifications to the list of assets and liabilities below would result in a net worth of \( \$ 100,000 \) ? Recreational Vehicle valued at \( \$ 110,000 \). Car valued at \( \$ 27,000 \). Medical bills totaling \( \$ 8,700 \). Loan balance of \( \$ 80,000 \). Savings of \( \$ 5,000 \). Retirement fund of \( \$ 50,000 \). Credit card balance of \( \$ 2,300 \). a. recreational vehicle value decreasing to \( \$ 100,000 \) b. borrowing \( \$ 10,000 \) more in loans c. withdrawing \( \$ 20,000 \) from the retirement fund d. adding \( \$ 1,000 \) in credit card debt

We begin by calculating the current net worth using the given list. **Step 1. Calculate current assets:** \[ \text{Recreational Vehicle} = \$110,\!000 \] \[ \text{Car} = \$27,\!000 \] \[ \text{Savings} = \$5,\!000 \] \[ \text{Retirement Fund} = \$50,\!000 \] \[ \text{Total Assets} = 110,\!000 + 27,\!000 + 5,\!000 + 50,\!000 = \$192,\!000 \] **Step 2. Calculate current liabilities:** \[ \text{Medical Bills} = \$8,\!700 \] \[ \text{Loan Balance} = \$80,\!000 \] \[ \text{Credit Card Balance} = \$2,\!300 \] \[ \text{Total Liabilities} = 8,\!700 + 80,\!000 + 2,\!300 = \$91,\!000 \] **Step 3. Compute current net worth:** \[ \text{Net Worth} = \text{Total Assets} - \text{Total Liabilities} = 192,\!000 - 91,\!000 = \$101,\!000 \] We need a modification that adjusts the net worth to exactly \$100,000. Now, let’s analyze each option: --- **Option (a):** Modify the recreational vehicle value to \$100,000. - New recreational vehicle value: \$100,000 - New total assets: \[ 100,\!000 + 27,\!000 + 5,\!000 + 50,\!000 = \$182,\!000 \] - Liabilities remain \$91,000. - New net worth: \[ 182,\!000 - 91,\!000 = \$91,\!000 \] This does not result in \$100,000. --- **Option (b):** Borrow an additional \$10,000 (increase loan balance). - New loan balance: \$80,000 + \$10,000 = \$90,\!000 - Liabilities become: \[ 8,\!700 + 90,\!000 + 2,\!300 = \$101,\!000 \] - Assets remain \$192,000. - New net worth: \[ 192,\!000 - 101,\!000 = \$91,\!000 \] This does not result in \$100,000 either. --- **Option (c):** Withdraw \$20,000 from the retirement fund. - New retirement fund value: \$50,000 - \$20,000 = \$30,\!000 - New total assets: \[ 110,\!000 + 27,\!000 + 5,\!000 + 30,\!000 = \$172,\!000 \] - Liabilities remain \$91,\!000. - New net worth: \[ 172,\!000 - 91,\!000 = \$81,\!000 \] This also does not result in \$100,000. --- **Option (d):** Add \$1,000 in credit card debt. - New credit card balance: \$2,300 + \$1,000 = \$3,\!300 - New liabilities become: \[ 8,\!700 + 80,\!000 + 3,\!300 = \$92,\!000 \] - Assets remain \$192,000. - New net worth: \[ 192,\!000 - 92,\!000 = \$100,\!000 \] This modification results in a net worth of \$100,000. --- The correct modification is: \( \textbf{Option (d): adding } \$1,\!000 \textbf{ in credit card debt.} \)