Mr. Thom makes $[tex]$25,900[/tex] /year salary as a document processor. He has made the following chart in order to divide his weekly paycheck into his accounts:
| Expense type | Account | Weekly deposits |
|---|---|---|
| Essential (Fixed) | 1st Checking account | $219 |
| Essential (Variable) | 1st Checking account | $115 |
| Non-essential | 2nd Checking account | $40 |
| Other (Unexpected) | Emergency savings account | $20 |
| Other (Predictable) | Education investment fund | $10 |
| Other (Predictable) | Retirement investment fund | $40 |
| Other (Predictable) | Emergency savings account | $15 |
| Total paycheck | | $498 |
Unfortunately, he has made a mistake in adding the numbers and has not allocated all of the paycheck. If he deposits the difference into the two emergency savings accounts, how much total per week can he then put toward emergency savings?
a. $[tex]$40[/tex]
b. $[tex]$60
Answer (1)
Calculate Mr. Thom's weekly paycheck: 52 25900 = $498.08 .
Determine the current allocation to emergency savings: 20 + 15 = $35 .
Calculate the difference between the weekly paycheck and the allocated amount: 498.08 − 459 = $39.08 .
Add the difference to the current emergency savings: 35 + 39.08 = $74.08 . The closest answer is not among the choices, indicating a possible error in the problem statement.
Explanation
Calculate Weekly Paycheck First, we need to determine Mr. Thom's actual weekly paycheck amount. His annual salary is $25 , 900 , so we divide this by the number of weeks in a year (52) to find his weekly pay.
Weekly Paycheck Amount 52 25900 = 498.08 (rounded to the nearest cent).
Current Emergency Savings Allocation Next, we need to calculate the total amount currently allocated to emergency savings. From the chart, he allocates $20 and $15 to emergency savings each week.
Total Current Allocation 20 + 15 = 35 So, he currently allocates $35 to emergency savings.
Total Allocated Amount (Chart) Now, let's calculate the total amount Mr. Thom thinks he is allocating each week according to his chart. We sum all the weekly deposits listed: $219 + $115 + $40 + $20 + $10 + $40 + $15 .
Total Allocation 219 + 115 + 40 + 20 + 10 + 40 + 15 = 459 According to the chart, Mr. Thom thinks he is allocating $459 per week.
Calculate the Difference We need to find the difference between his actual weekly paycheck and the amount he thinks he is allocating. This difference will be added to his emergency savings.
Difference in Allocation 498.08 − 459 = 39.08 The difference is $39.08 .
New Total Emergency Savings Finally, we add this difference to the current total allocation to emergency savings to find the new total allocation to emergency savings.
Total Emergency Savings 35 + 39.08 = 74.08 Therefore, Mr. Thom can put a total of $74.08 toward emergency savings per week.
Re-evaluating the Answer Since the question asks how much total per week he can put toward emergency savings, the answer is $74.08 . However, the provided options are $40 and $60 . It seems there might be a rounding issue or a slight miscalculation in the provided information. Given the options, we need to re-evaluate our approach to match one of the answers.
Assuming Paycheck is 498 L e t ′ s a ss u m e t h e t o t a lp a yc h ec ki s a c t u a ll y $498$ as stated in the table. Then the difference would be: 498 − 459 = 39 . Adding this to the current emergency savings: 35 + 39 = 74 . This still doesn't match the given options.
Analyzing the Options Let's analyze the options. If the answer is $40 , then the additional amount to emergency savings would be 40 − 35 = 5 . This would mean the total allocated amount is 498 − 5 = 493 . However, 459 + 5 = 464 , not 493 . If the answer is $60 , then the additional amount to emergency savings would be 60 − 35 = 25 . This would mean the total allocated amount is 498 − 25 = 473 . However, 459 + 25 = 484 , not 473 .
Final Analysis and Conclusion Given the discrepancy and the available options, it's likely there's a rounding error or a misunderstanding of the problem. However, based on our calculations, the closest answer to the correct amount ( $74.08 ) is not among the choices. Let's assume the weekly paycheck is exactly $498.00 as given in the table. The unallocated amount is $498 - 459 = $39. Adding this to the existing emergency savings of $20 + 15 = $35 gives a total of $35 + 39 = 74. S in ce t hi s i s n o t an o pt i o n , an d w e a re f orce d t oc h oose b e tw ee n $40 an d $60$, there must be an error in the problem statement. However, based on the closest possible logic, we can't definitively choose either option.
Examples
Understanding how to allocate your paycheck effectively is crucial for financial stability. For example, if you earn a fixed amount per month, you can use this method to determine how much to allocate to different categories like rent, food, savings, and entertainment. By tracking your expenses and comparing them to your planned allocations, you can identify areas where you can save more money or adjust your budget to better meet your financial goals. This ensures that you are prepared for unexpected expenses and can achieve your long-term financial objectives.
