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This is the O'Donnells' monthly budget. Living Expenses Fixed Expenses Annual Expenses Income Food $467 Mortgage $489 Home Insurance $146 $1720 Transportation $175 Car Payment $107 Car Insurance $780 Household $194 Savings $35 Life Insurance $150 Personal $124 Contingency $30 Vacation $700 To balance the budget, how much money must be cut from the budget?

Respuesta :

Edufirst

Answer:

  • $49 per month must be cut.

Explanation:

1. Start by presenting the budget neatly:

Montly expenses:

    Living Expenses

          Food $467

          Transportation $175

          Household $194

          Personal $124

    Fixed Expenses

          Mortgage $489

          Car Payment $107

          Savings $35

          Contingency $30

Annual Expenses

     Home Insurance $146

     Car Insurance $780

     Life Insurance $150

     Vacation $700

Monlty income

         $1720

2. Divide the annual expenses by 12 to convert them into an average montly expense:

  • Annual expenses = $146 + $780 + $150 + $700 = $1776

  • Average per month = $1776 / 12 = $148

3. Add all the montly expenses:

  • Living expenses = $467 + $175 + $194 + $124 = $960

  • Fixed expenses = $489 + $107 + $35 + $30 = $661

  • Total = $960 + $661 =$1,621

4. Add the monthly expenses with the average per month of the annual expenses:

  • Total = $1,621 + $148 = $1,769

5. Compare the montly income with the monhly expenses:

  • Income minus total expenses per month = $1720 - $1,769 = -$49

Conclusion

There is a deficit of $ 49 per month, so $49 per month must be cut.

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