Income and Expenses

Show your work for each problem.

1.
Which of the following is an example of income?
1. a)Rent payment
2. b)Bus ticket
3. c)Grocery shopping
4. d)Salary from a job
Answer: Salary from a job
Salary from a job is income because it's money you receive. Rent, groceries, and bus tickets are all expenses - money you spend.
2.
Which expense is a fixed expense?
1. a)Monthly rent
2. b)Restaurant meals
3. c)Clothing shopping
4. d)Movie tickets
Answer: Monthly rent
Monthly rent is a fixed expense because it's the same amount each month. Restaurant meals, movies, and clothing are variable expenses that change month to month.
3.
Tom earns 80 dollars a month from his job and gets 20 dollars a month in allowance. What is his total monthly income?
Answer: 100
Total income = Job income + Allowance = $80 + 20 = 100$ dollars.
4.
Sara spends 30 dollars on food, 15 dollars on entertainment, and 10 dollars on transportation. What are her total expenses?
Answer: 55
Total expenses = Food + Entertainment + Transportation = $30 + 15 + 10 = 55$ dollars.
5.
If income is 150 dollars and expenses are 120 dollars, what is the net income?
Answer: 30
Net income = Income - Expenses = $150 - 120 = 30$ dollars. This is positive, meaning you saved money.
6.
If someone has a negative net income, what does this mean?
1. a)They saved money
2. b)Their income and expenses are equal
3. c)They have no expenses
4. d)They spent more than they earned
Answer: They spent more than they earned
A negative net income (deficit) means expenses were greater than income. Net Income = Income - Expenses, so if expenses are higher, the result is negative.
7.
Emma earns 200 dollars and spends 240 dollars. What is her net income?
Answer: -40
Net income = $200 - 240 = -40$ dollars. Emma has a deficit of 40 dollars, meaning she spent 40 dollars more than she earned.
8.
Jake has income of 180 dollars (job: 150 dollars, allowance: 30 dollars) and expenses of 160 dollars (food: 60 dollars, entertainment: 50 dollars, transportation: 30 dollars, clothes: 20 dollars). Calculate his net income.
Answer: 20
1. What is the total income from job and allowance? 180
2. What is the total of all expenses? 160
3. Calculate net income: Income - Expenses 20
9.
Lisa wants to buy a 120 dollar tablet. She saves 40 dollars each month. How many months does she need to save?
Answer: 3
1. What is the cost of the tablet? 120
2. How much does Lisa save each month? 40
3. Divide the cost by monthly savings to find months needed 3
10.
An annual magazine subscription costs 60 dollars. What is the monthly equivalent expense?
1. a)12 dollars
2. b)30 dollars
3. c)60 dollars
4. d)5 dollars
Answer: 5 dollars
Monthly equivalent = Annual cost ÷ 12 = $60 ÷ 12 = 5$ dollars per month. This helps you budget for annual expenses monthly.
11.
A family earns 3500 dollars monthly. Their fixed expenses are 2000 dollars (rent: 1200 dollars, insurance: 300 dollars, car payment: 500 dollars) and variable expenses are 800 dollars. What is their net income?
Answer: 700
1. What is the total monthly income? 3500
2. What are the total fixed expenses? 2000
3. What are the total expenses (fixed + variable)? 2800
4. Calculate net income: Income - Total Expenses 700
12.
Carlos has a deficit of 50 dollars per month. His income is 250 dollars. If he wants to save 30 dollars each month instead, how much must he reduce his expenses?
Answer: 80
1. What is Carlos's current income? 250
2. If deficit is 50, what are current expenses? (Income - Expenses = -50) 300
3. To save 30, what should expenses be? (Income - Expenses = 30) 220
4. How much must expenses decrease? (Current - Target) 80
13.
Mia wants to save 25% of her 240 dollar monthly income. How much can she spend at most each month?
Answer: 180
Savings = $25\% \times 240 = 0.25 \times 240 = 60$ dollars. Maximum expenses = $240 - 60 = 180$ dollars.
14.
The Johnson family's monthly budget: Income: salary 4200 dollars, rental income 800 dollars. Expenses: mortgage 1400 dollars, utilities 250 dollars, groceries 600 dollars, car costs 450 dollars, insurance 350 dollars, entertainment 200 dollars. Their savings goal is 500 dollars per month. How much more than their savings goal do they have left over each month?
Answer: 1250
1. Calculate total income (Salary + Rental income) 5000
2. Calculate total expenses (all 6 expense categories) 3250
3. Calculate net income (Income - Expenses) 1750
4. How much more than the 500 dollar goal is left over? 1250
15.
Alex's budget shows: Income = 500 dollars, Fixed expenses = 200 dollars, Variable expenses = 250 dollars. What percentage of income goes to variable expenses?
1. a)50%
2. b)25%
3. c)40%
4. d)55%
Answer: 50%
Variable expense percentage = $\frac{250}{500} \times 100 = 50\%$ . Half of Alex's income goes to variable expenses.