Question

The Chambers family has a net monthly income of $6,500.

Chambers Family Budget:
Savings 7%
Clothing 18%
Medical 10%
Emergency Fund 8%
Transportation 12%
Food 20%
Housing 25%
If the family decides to reduce its clothing budget by $200 a month, how much would the new clothing budget be? Round to the nearest dollar.
$161
$853
$970
$1,170

Answer 1

.18 x 6500 = 1170

1170 - 200 = 970

Answer = $970

Answer 2

Option C $970 is the new clothing budget.

Explanation:

The Chambers family has a net monthly income = $6,500

Chambers family budget for Clothing = 18% of net income

= (18/100) × 6500

= 0.18 × 6500 = $1,170.00

The budget of Chambers family is $1,170.00 per month, Now the family decides to reduce its clothing budget by $200 a month.

Therefore, we subtract $200 from his old budget to get new clothing budget.

1,170 - 200 = $970.00

Now the new clothing budget of the family is $970.