Question

Traci budgeted $770 for fixed expenses and $530 for living expenses per month. She has no annual expenses Her annual net incomeis $16.752Is her budget balanced or not, and if it shows a surplus or a deficit, what is the amount?It shows a surplus of $96.It is balancedIt has a deficit of $602.It shows a deficit of S96.

Answer 1

From the information available, we have Traci's monthly budget as follows;

`\begin{gathered} \text{Fixed exp}=770 \\ \text{Living exp}=530 \\ \text{Total monthly budget}=1300 \end{gathered}`

If her net annual income is $16752, then her monthly income would be;

`\begin{gathered} \text{Annual income}=16752 \\ \text{Monthly income}=\frac{Annual\text{ income}}{12} \\ \text{Monthly income}=(16752)/(12) \\ \text{Monthly income}=1396 \end{gathered}`

To determine if the monthly budget is balanced, surplus or deficit, we shall find the difference between budgeted amount and actual income.

If both figures are equal, we have a balance

If the income is higher than the budget, we have a surplus

If the income is lesser than the budget, we have a deficit.

The income here is $1,396 and this is higher than the budget which is, $1,300. Therefore we would have;

`\begin{gathered} \text{Income}-\text{Budget}=1396-1300 \\ \text{Income}-\text{Budget}=96 \end{gathered}`

ANSWER:

Her budget is not balanced.

It shows a surplus of $96