Question

Multiply the result in (4) with the annual buying frequency (which refers to the number of times or the quantity of products bought in a year). The result is called Annual Spending.

Answer 1

Annual Spending is calculated by multiplying the total cost of a basket of goods by the annual buying frequency.

This gives the total amount spent on each product annually, determining the overall financial impact of purchases made throughout the year.

Step-by-step explanation:

To calculate Annual Spending, as outlined in the information provided, we must first determine the total cost of buying a basket of goods in each time period. For example, purchasing 10 apples at 50 cents each results in $5.00 spent on apples.

Likewise, 12 bananas at 20 cents each totals $2.40 for bananas, and 2 bunches of grapes at 65 cents each amounts to $1.30 spent on grapes.

Once we have the total cost for each fruit, we then multiply this figure by the annual buying frequency, which is the number of times these products are bought within a year.

This operation gives us the Annual Spending on each fruit. For instance, if the annual buying frequency for apples is 10 times per year, then the Annual Spending on apples would be $5.00 multiplied by 10, equating to $50.00 per year. This method is applicable for calculating expenditure over various periods, as suggested by the multiplier formula mentioned, which projects the impact of expenditure increases over time.