Question

Ryan is working on his first budget. He has placed all of the fixed expenses on the budget shown and would like to use the information to evaluate his variable expenses. Ryan's take-home pay is $2,500 each month. Complete the percentage column in the table and then answer the questions below.

Category Amount Percentage
Rent $800 ____
Food $450 ___
Utilities $125 ___
Car payment $325 ___
Gas $125 ___

Answer 1

Ryan's fixed and variable expenses consume 73% of his income, leaving 27% for other uses. He should consider all expenses and savings in his budget.

Step-by-step explanation:

Ryan is working on his first budget and needs to calculate the percentage of his take-home pay that each expense category represents. To do this, we divide each expense by Ryan's monthly take-home pay and then multiply by 100 to get a percentage.

1. For rent: (800 / 2500) × 100 = 32%
2. For food: (450 / 2500) × 100 = 18%
3. For utilities: (125 / 2500) × 100 = 5%
4. For car payment: (325 / 2500) × 100 = 13%
5. For gas: (125 / 2500) × 100 = 5%

Now if we add up all the percentages, we get a total of 73% of Ryan's income that goes towards these fixed and variable expenses. This leaves 27% of his income for other variable expenses and savings. When budgeting, it's important for Ryan to consider all types of expenses and ideally allocate a portion of his income to savings.