To determine whether net worth is the difference between the value of your total assets and your total debts, we need to understand what net worth is.
Net worth is a fundamental financial metric that represents the total value of an individual’s or entity’s financial position. It is calculated as follows:
1. Total Assets: This includes everything you own that has value, such as cash, investments, real estate, vehicles, and other personal property.
2. Total Debts (or Liabilities): This includes everything you owe, such as mortgages, car loans, student loans, credit card debt, and other liabilities.
The formula for net worth is:
[tex]\[ \text{Net Worth} = \text{Total Assets} - \text{Total Debts} \][/tex]
Given this explanation:
- If the value of your total assets minus the value of your total debts equals your net worth, then the statement is true.
Therefore, the correct answer is:
a) True
