Final answer:
To compute the total annual cost of expenses, multiply each monthly expense by 12 and sum them. Subtract the total annual expenses from the annual take-home pay to find discretionary spending.
To determine what percentage one set of expenses is of another, divide the annual cost of the first by the total and multiply by 100, which in this case is 66.67%.
Step-by-step explanation:
To calculate the total annual cost of expenses and find out what percentage one set of expenses is of another, you would perform several calculations. First, it is necessary to find the annual cost of each individual expense by multiplying the monthly expenses by 12 (as there are 12 months in a year), and then summing them up.
For a person with a take-home pay of $50,000 per year:
- Rent: $2,000 per month
- Groceries and other bills: $1,000 per month
To find the total annual cost of rent and bills:
- Total annual cost for rent = $2,000 per month x 12 months = $24,000
- Total annual cost for groceries and bills = $1,000 per month x 12 months = $12,000
Add up these two expenses to get the total annual expenses:
- Total annual expenses = $24,000 (rent) + $12,000 (groceries/bills) = $36,000
To determine how much of the take-home pay is left for discretionary spending and to find out what percentage one set of expenses is of another, you take the total annual expenses and subtract them from the annual take-home pay:
- Discretionary spending per year = $50,000 (annual take-home pay) - $36,000 (total annual expenses) = $14,000
Finally, to find out what percentage the first set of expenses (rent) is of the second set (rent and groceries/bills), you divide the annual cost for rent by the total annual expenses and multiply by 100:
- Percentage = ($24,000 / $36,000) x 100 = 66.67%
In conclusion, on an annual basis, the first set of expenses (rent) is 66.67% of the second set of expenses (rent and groceries/bills).