Question

You have a gross income of $80,000. Your gross income is taxed by the state and the federal government at two separate rates. The state taxes 5% of your gross income and the federal government taxes 25% ofyour gross income. 1. Calculate your monthly net income. (Use this number to start your budget) 2. Categorize expenses: Determine if your expenses are fixed or variable, and write them in the appropriate sections of the table below (on the exam it will be on your answer sheet). Remember your expenses include: rent, car, car insurance, cellphone, utilities, entertainment, food, savings, and occasional expenses. Use the chart to divide the percentages of your monthly net pay Rent: 30% of net pay Savings: 10% of net pay Utilities: 10% of net pay Food: 15% of net pay Car Insurance: 5% of net pay Car Loan: 10% of net pay Cell Phone: 5% of net pay Entertainment: 5% of net pay Occasional Spending: 10% of net pay Cost Fixed Expenses Variable Expenses

Answer 1

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