Question

Angela's monthly disposable income is ​$2928. She has monthly expenses of ​$ 2664 ​(including recreational expenses of ​$379​) and net cash flow of ​$264 per month. Angela analyzes her personal budget and decides that she can reduce her recreational spending by ​$55 per month. If Angela is saving ​$319 per​ month, what is her savings rate​ (i.e., savings as a percentage of disposable​ income)?

Answer 1

The answer is: Angela's savings rate is 10.89%

Step-by-step explanation:

To calculate Angela's savings rate we can use the following formula:

Angela's savings rate = (total amount saved / total disposable income) x 100%

Angela's savings rate = ($319 / $2,928) x 100% = 0.1089 x 100%

Angela's savings rate = 10.89%