4. Suppose that Jacob's has a salary of $25,000, a motorcycle worth $12,000 and a checking account with a $3,000 balance, while his liabilities include a credit card balance of $4,000 and a motorcycle loan balance of $7,000. What is his net worth? 5. Mike and Mary Jane Lee have a yearly income of $100,000 and own a house worth $90,000, two cars worth a total of $20,000 and furniture worth $10,000. The house has a mortgage of $50,000 and the cars have outstanding loans of $2,000 each. Utility bills, totaling $150 for this month, have not been paid. a. Calculate their net worth and explain what it means. b. How would the Lees' age affect your assessment of their net worth? Assume they are 60 . c. What is their debt ratio? What does it mean? 6. Ed and Marta are paid $4,000 after taxes every month. Monthly expenses include $2,000 on housing and utilities, $600 for auto loans, $500 on food, and an average of $600 on clothing and other variable expenses. a. Calculate their savings ratio. b. Interpret the savings ratio. What does it mean? How does that compare to a recommended level? 7. The Potinsky household spends $39,900 annually on all living expenses and long-term debt. a. Calculate the amount recommended for an emergency fund. b. How might household circumstances affect this decision? 8. Tim and Autumn Davis are trying to figure out their current financial health. They will pay off their car loan in three years, their gross household income is $5,700 per month, and they receive $95 per month in interest income from their investments. They have listed the following items from their most recent statements. Savings account: $3,200 Checking account: $1,800 Credit card balance: $3,000 Car loan balance: $18,000 Car market value: $15,000 Furniture market value: $4,000 Stocks and bonds: $15,000 a. What is their current net worth? b. Assuming that they have no current bills other than those that are listed, what is their current ratio? c. What is their debt ratio