Predict how much money can be saved without having a negative actual net income.
| Monthly Budget | Budgeted Amount | Actual Amount |
| :------------- | :-------------- | :------------ |
| Income | $1025 | $675 |
| Expenses | | |
| Rent | $300 | $300 |
| Utilities | $100 | $100 |
| Food | $175 | $200 |
| Cell Phone | $75 | $75 |
| Savings | $300 | $ |
| Net Income | $75 | $ |
A. It is not possible to save any money this month without having a negative actual net income.
B. $350 can be saved resulting in an actual net income of $0.
C. $200 can be saved resulting in an actual net income of $75.
D. Because there is a $75 budgeted net income, that $75 can be put towards savings.
Answer (1)
Calculate total actual expenses: $300 + $100 + $200 + $75 = $675. - Calculate actual net income before savings: $675 (Income) - $675 (Expenses) = $0.
Determine maximum savings amount: $0 (Net Income Before Savings) - Savings >= 0, which means Savings <= $0.
Conclude that it is not possible to save any money this month without a negative actual net income: It is not possible to save any money this month without having a negative actual net income.
Explanation
Analyze the Budget First, let's analyze the given budget to understand the actual financial situation. We have the actual income and expenses, and we want to determine how much money can be saved without having a negative actual net income.
Calculate Total Actual Expenses Next, we need to calculate the total actual expenses. These include rent, utilities, food, and cell phone costs. So, we add these up: $300 (Rent) + $100 (Utilities) + $200 (Food) + $75 (Cell Phone).
Determine Total Expenses The total actual expenses are calculated as follows: 300 + 100 + 200 + 75 = 675 So, the total actual expenses are $675.
Calculate Actual Net Income Before Savings Now, we need to calculate the actual net income before considering savings. This is the actual income minus the total actual expenses: 675 ( I n co m e ) − 675 ( E x p e n ses ) = 0 So, the actual net income before savings is $0.
Determine Maximum Savings Amount To determine the maximum savings amount, we need to ensure that the actual net income after savings is not negative. This means that the actual net income before savings minus the savings should be greater than or equal to zero: 0 ( N e t I n co m e B e f ore S a v in g s ) − S a v in g s ≥ 0 This simplifies to: S a v in g s ≤ 0 Therefore, the maximum amount that can be saved without having a negative actual net income is $0.
Conclusion Based on our calculations, it is not possible to save any money this month without having a negative actual net income.
Examples
Understanding how to manage a budget and calculate savings is crucial in personal finance. For example, if you are planning a vacation, you need to track your income and expenses to determine how much you can save each month. By carefully monitoring your spending and identifying areas where you can cut back, you can maximize your savings and achieve your financial goals, such as affording that dream vacation or paying off debt. This problem demonstrates the importance of accurately calculating expenses and income to make informed decisions about savings.
