Analyze the following budget, with an income of $750, to determine how much can be spent on food for the month.
| |
| :------------------ | :---------- |
| Food | $ |
| Personal items | $20 |
| Cell Phone | $75 |
| Entertainment | $85 |
| Car Expenses - Gas, Insurance | $260 |
| College Savings | $250 |
Which of the following is true?
A. No more than $70 can be spent on food.
B. No more than $75 can be spent on food.
C. No more than $80 can be spent on food.
D. No more than $60 can be spent on food.
Answer (2)
After analyzing the budget, it is determined that no more than $60 can be spent on food. Therefore, the correct answer is option D. This was found by calculating total expenses and subtracting them from the total income.
;
Calculate total expenses (excluding food): $20 + $75 + $85 + $260 + $250 = $690.
Subtract total expenses from income: $750 - $690 = $60.
Determine the maximum amount for food: $60.
Select the correct answer: No more than $\boxed{ 60} can be spent on food.
Explanation
Understanding the Problem We are given a budget with an income of $750 and several expenses. Our goal is to determine the maximum amount that can be spent on food for the month.
Calculating Total Expenses First, let's calculate the total expenses, excluding food. These include personal items, cell phone, entertainment, car expenses, and college savings.
Summing the Expenses The expenses are:
Personal items: $20
Cell Phone: $75
Entertainment: $85
Car Expenses: $260
College Savings: $250 Adding these up, we get: 20 + 75 + 85 + 260 + 250 = 690 So, the total expenses are $690.
Finding the Amount for Food Now, we subtract the total expenses from the income to find the amount available for food: 750 − 690 = 60 This means that $60 can be spent on food.
Selecting the Best Answer Comparing this result with the given options, we see that option d, "No more than $60 can be spent on food," is the correct answer.
Examples
Budgeting is a crucial skill in personal finance. For instance, if you earn a fixed monthly income and have recurring expenses like rent, utilities, and transportation, creating a budget helps you allocate your funds effectively. By tracking your spending and comparing it against your income, you can identify areas where you can save money, such as reducing entertainment expenses or finding cheaper alternatives for personal items. This ensures you have enough money for essential needs like food and savings, preventing overspending and promoting financial stability.
