Damian wants to save $7200 to buy a car within the next 2 years. Which budget would help Damian save enough money to buy a car in a timely manner with minimal effect on his other essential expenses?
| Monthly Budget | Budget A | Budget B | Budget C | Budget D |
| :------------- | :------- | :------- | :------- | :------- |
| Income | $1000 | $1,000 | $1,000 | $1,000 |
| Expenses | | | | |
| Rent | $300 | $300 | $300 | $300 |
| Utilities | $75 | $75 | $75 | $75 |
| Food | $150 | $150 | $75 | $150 |
| Bus Pass | $25 | $25 | $0 | $25 |
| Car Savings | $350 | $250 | $300 | $100 |
| School Savings | $100 | $200 | $250 | $350 |
A. Budget A
B. Budget B
C. Budget C
D. Budget D
Answer (1)
Calculate total savings for each budget by multiplying monthly savings by 24.
Compare total savings to the target of $7200 to identify viable budgets.
Among viable budgets, choose the one with the least impact on other expenses (lowest 'School Savings').
Budget A meets the savings goal with minimal impact on other expenses: B u d g e t A .
Explanation
Calculate Total Savings for Each Budget First, we need to determine which of the budgets allows Damian to save at least $7200 in 2 years (24 months). We will calculate the total savings for each budget by multiplying the monthly car savings by the number of months (24).
Budget A Savings Budget A: Monthly car savings are $350. Total savings after 24 months: $350 \times 24 = $8400.
Budget B Savings Budget B: Monthly car savings are $250. Total savings after 24 months: $250 \times 24 = $6000.
Budget C Savings Budget C: Monthly car savings are $300. Total savings after 24 months: $300 \times 24 = $7200.
Budget D Savings Budget D: Monthly car savings are $100. Total savings after 24 months: $100 \times 24 = $2400.
Compare Savings to Target Now, we compare the total savings of each budget to the target savings of $7200. Budget A saves $8400, Budget B saves $6000, Budget C saves $7200, and Budget D saves $2400. Budgets A and C meet the savings goal.
Consider Impact on Other Expenses Since both Budget A and Budget C meet the savings goal, we need to consider the impact on other essential expenses. We can use the 'School Savings' amount as a proxy for this. Budget A allocates $100 to school savings, while Budget C allocates $250. Budget A allocates less to school savings, meaning it has less impact on other essential expenses while still meeting the savings goal.
Conclusion Therefore, Budget A is the best option for Damian.
Examples
Imagine you're planning a road trip and need to save enough money for gas, snacks, and accommodation. This problem is similar to figuring out which savings plan will help you reach your goal the fastest without sacrificing your daily needs. By calculating how much you save each month and comparing it to your target, you can choose the best strategy to make your dream trip a reality. This involves budgeting, setting financial goals, and making informed decisions to achieve them.
