If your projected earnings in 10 years are $36,000 per year, what would you save in one year according to the 10% rule?
A.
$360
B.
$720
C.
$3,600
D.
$7,200
B. $720
Explanation: According to the 10% rule, you should aim to save 10% of your annual earnings. Therefore, 10% of $36,000 is $3,600. To find out how much you should save in one year, divide $3,600 by 12 months, which equals $300 per month. Therefore, in one year, you should aim to save $3,600. Alternatively, you could also multiply $36,000 by 0.10 to directly calculate the amount you should save in one year, which would be $3,600.
To calculate the amount you would save in one year according to the 10% rule, you need to multiply your projected earnings by 10% (or 0.10).
$36,000 x 0.10 = $3,600
Therefore, the correct answer is C. $3,600.