If Cloe's pay increases by 8%, and all her expenses do not change, what will be her possible savings?
Answer (2)
Calculate the amount of the pay increase: in cre a se = 0.08 × 1079.83 = 86.3864 .
Calculate the new salary: n e w _ s a l a ry = 1079.83 + 86.3864 = 1166.2164 .
Calculate the new savings by adding the increase to her current savings: n e w _ s a v in g s = 159.83 + 86.3864 = 246.2164 .
Cleo's new savings will be approximately 246.22 .
Explanation
Understanding the Problem Let's break down how to calculate Cleo's new savings after her salary increase. We'll start by finding the amount of the increase, then her new salary, and finally her new savings.
Calculating the Pay Increase First, we need to calculate the amount of the pay increase. Since Cleo's pay increases by 8%, we multiply her current salary by 0.08: in cre a se = 0.08 × 1079.83 = 86.3864 So, the increase in her salary is approximately $86.39.
Determining the New Salary Next, we calculate Cleo's new salary by adding the increase to her current salary: n e w _ s a l a ry = 1079.83 + 86.3864 = 1166.2164 Therefore, Cleo's new salary is approximately $1166.22.
Calculating the New Savings Now, we need to find Cleo's new savings. Since her expenses remain the same, the increase in her salary will directly add to her savings. So, we add the increase to her current savings: n e w _ s a v in g s = 159.83 + 86.3864 = 246.2164 Thus, Cleo's new savings will be approximately $246.22.
Final Answer Therefore, after an 8% pay increase, Cleo's new savings will be approximately $246.22.
Examples
Understanding how salary increases affect savings is crucial for personal finance. For example, if you budget $200 for entertainment each month and your income increases, the extra money can go directly into your savings if you maintain the same spending habits. This calculation helps you see how a raise can improve your financial health, allowing you to save for long-term goals like a down payment on a house or retirement.
Cloe's pay increases by 8%, resulting in an increase of approximately $86.39. Her new salary becomes around $1166.22, and her new savings, assuming her current savings are $159.83, will be approximately $246.22. This calculation shows how a salary increase can positively impact savings when expenses stay the same.
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