Subtracting a negative = adding a positive
About this video
Steve owes Michael $3, so his net worth is -3. His uncle wants to take away that -3 debt to bring Steve back to 0, which has the same effect as giving Steve $3. This shows that subtracting a negative is the same as adding a positive: -3 - (-3) = -3 + 3 = 0.
You'll be able to
- describe a debt as a negative net worth.
- explain why taking away a debt is the same as adding money.
- show that subtracting a negative gives the same result as adding a positive.
Key words
- Net worth
- What you have minus what you owe.
- Debt
- Money you owe someone; it counts as a negative amount.
- Liability
- Another word for something you owe, like a debt.
Transcript
This is Steve and this is Steve's uncle and Steve is in a bit of a bind. Not only does he not have any money but he also owes Michael, who is not depicted here. He owes Michael $3. So he actually has a negative net worth. Steve has a net worth of -3. Steve's uncle cares about Steve and feels bad that he doesn't even have a 0 net worth; he has a negative net worth!
And so Steve's uncle wants to at least take away some of this pain. He at least wants to get Steve back to a neutral net worth, a 0 net worth. So he decides to take away Steve's negative net worth. He wants to take away that -3. What happens if you take away that -3? Well, that should get you back to 0.
If you take away anything... if you have something and you take it away, it should go back to 0. Similarly if you owe people things and that owing people things is taken away, it also gets back to 0. And another way to think about it is how Steve's uncle would actually take that liability, take that debt away from Steve.
Well, the easiest way he could do it if Steve is starting at -3 net worth is for his uncle to give Steve $3, so that he(Steve) can get back to a net worth of 0. So hopefully, that makes it a little bit clearer, that this and this are intuitively equivalent.
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