1. Mike and Mary Jane Lee have a yearly income of $65,000 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. Calculate or use Worksheet 4 to determine their net worth and explain what it means. How would the Lees' age affect your assessment of their net worth?
2. If the Potinsky household spends $39,000 annually on all living expenses and long-term debt, calculate the amount recommended for an emergency fund. How might household circumstances (e.g, wage earners in the household, available credit, type and stability of employment) affect this decision?