Analyze the following budget, with an income of $750, to determine how much can be spent on food for the month.
| Month | Budgeted Amount |
|-------|-----------------|
| Food | $ |
| Personal Items | $20 |
| Cell Phone | $75 |
| Entertainment | $85 |
| Car Expenses - | $260 |
| Gas, Insurance | |
| College Savings | $250 |
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.
Please select the best answer from the choices provided
Answer (1)
Calculate the total expenses excluding food: 20 + 75 + 85 + 260 + 250 = 690 .
Subtract the total expenses from the total income to find the remaining amount for food: 750 − 690 = 60 .
Compare the calculated maximum amount with the given options.
Select the option that is less than or equal to the calculated amount: $60 .
Explanation
Understanding the Problem We are given a budget with a total 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, we need to 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 Remaining Amount for Food Next, we subtract the total expenses from the total income to find the remaining amount, which represents the maximum amount that can be spent on food: 750 − 690 = 60 Therefore, the maximum amount that can be spent on food is $60.
Selecting the Correct Option Finally, we compare our result ($60) with the given options: 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. The correct answer is d, as $60 is the maximum amount that can be spent on food according to our calculations.
Examples
Budgeting is a crucial skill in personal finance. For instance, if you earn a fixed monthly income and need to allocate funds for rent, utilities, transportation, and savings, understanding how to calculate and manage these expenses helps you determine how much you can spend on discretionary items like entertainment or dining out. By carefully tracking and subtracting necessary expenses from your income, you can ensure you don't overspend and can achieve your financial goals.
