Question

Last year, Mr. Engle's total income was $52,000, while his total expenses were $53,800. Use the expression I-E/12, where I represents total income and E represents total expenses, to find the average difference between his income and expenses each month. Then explain its meaning.

Answer 1

The average difference in income and expenses each month is -150,

It shows every month the expenses is $ 150 more than income.

Explanation:

Given formula of average difference between his income and expenses each month,

`A=(I-E)/(12)` ( Suppose A )

Where,

I = total income,

E = total expenses,

We have, I = $ 52,000, E = $ 53,800,

Thus, by substituting the values,

The average difference in income and expenses each month,

`A=(52000-53800)/(12)=(-1800)/(12)=-\$150`

Negative sign shows that the expenses exceed the income every month.

Answer 2

Given Mr. Engle’s total income, I = $52,000 and total expenses, E = $53,800, solving for average difference between income and expenses per month:
(I-E)/12 = ($52,000 - $53,800)/12
(I-E)/12 = - $1,800/12
(I-E)/12 = -$150
This means that Mr. Engle’s expenses exceed his income by an average of $150 each month in the said year.