Credit card debt to investment loan

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Reference no: EM133121428

Financial Statements

The table below is Tobias and Antonia's balance sheet as of December 31, 2021. 

Assets  

 

Liabilities

 

Checking account

$6,000  

Credit card balances

 

Savings account

$3,000  

American Express Card (22% interest)

$6,500  

Cash  

$500  

Master Card (20%)

$8,000  

Market value of home

$780,000  

Car loan

$13,000  

Market value of car (Honda)

$15,000  

Loan from Antonia's mother

$150,000  

Furniture

$5,000  

Mortgage

$400,000  

Computer & electronics         

$8,000  

 

 

Jewelry

$1,500  

 

 

RRSP

$6,500  

 

 

Mutual funds

$15,000  

 

 

Total assets

$835,300  

Total liabilities

$563,000  

 

 

 

 

Net Worth

$272,300  

 

 

1. If the average spending of Tobias and Antonia is $61,200 per year, (1) compute their liquidity ratio and (2) explain if their liquidity ratio is in appropriate range. Round to two decimal places of percentage (e.g., 11.11%)

2. How much interest could be saved annually if Tobias and Antonia can convert credit card debt to investment loan? They can get investment loan at 6% interest.

Reference no: EM133121428

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