Question

Bob and Sally's mortgage payment increases to $1632.00. Their roof starts to leak and they need to replace it. They budget $500 per month (replace the old student loan charge with roof expense).

Answer 1

Answer:

List of expenses is attached below.

Total Income = $160 + $6245 = $6405

1) Do Bob and Sally have a surplus or deficit?

As mortgage payment has increased, we replace $1580 with $1632 in the table

Replace student loans with roof expense, we replace $544 with $500 in the table.

Find Total Expenses by adding all the values from the table.

Total Expenses = $6660.17

Total Income  =$6405

They have a deficit

2) By how much?

Deficit = $6660.17 - $6405 = $255.17

Deficit = $255.17

3) They decide to stop putting money in savings. How much their balance be?

Savings = 10% of income = 10% OF $6405

Savings = (10/100)· $6405 = $640.5

New total expenses = $6660.17 - $640.5

New total expenses = $6019.67

Balance = Total income - New total expenses = $6405 - $6019.67

Balance = $295.33

4) Do you agree with them removing the savings to create surplus?

Yes, they had to remove the savings to fulfill their expenditures. Otherwise, they would have been spending more than their income, which couldn't last very long