Upon completion of his degree, Michael is hired as a technician at the rate of $900 every two weeks (after taxes). His monthly bills, payable on the first of the month, are:
Rent $500
Electricity 80
Gas (heat) 65
Car payment 300
Car insurance 70
Fuel for car 80
Groceries 150
Credit cards 200
Given Michael’s current expenses, how much money is available weekly for leisure spending?
Instead of spending his additional earnings each month, Michael chooses to open a savings account offering 3% interest, accrued monthly. Calculate the amount of money Michael will have in his savings account at the end of each of the following periods.
(a) three months
(b) six months
(c) one year
Incomplete post.
I was asked the same problem in my class. 88.75 left weekly
The answer I got was $116.54 weekly. If you divide his bi-weekly in half and multiply by 52 (weeks in a year), then divide by 12 (months).
To determine how much money Michael has available weekly for leisure spending, we need to calculate his monthly expenses and subtract them from his biweekly income.
First, let's calculate his monthly expenses:
Rent: $500
Electricity: $80
Gas (heat): $65
Car payment: $300
Car insurance: $70
Fuel for car: $80
Groceries: $150
Credit cards: $200
Total monthly expenses = $500 + $80 + $65 + $300 + $70 + $80 + $150 + $200 = $1445
Since Michael is paid every two weeks, we can divide his monthly expenses by two to find his biweekly expenses:
Biweekly expenses = $1445 / 2 = $722.50
Now, let's calculate his biweekly income:
Income every two weeks (after taxes) = $900
To find the amount of money available weekly for leisure spending, we divide his biweekly income by two:
Money available weekly for leisure spending = $900 / 2 = $450
Therefore, Michael has $450 available each week for leisure spending.
Now let's move on to calculating the amount of money Michael will have in his savings account at the end of each period:
(a) Three months:
To calculate the amount of money Michael will have in his savings account after three months, we need to calculate the interest earned and add it to his initial savings.
Principal (initial savings) = $0 (since he is just starting)
Interest rate = 3% per month
To calculate the interest earned, we multiply the principal by the interest rate:
Interest earned = $0 * 3% = $0
The amount of money Michael will have in his savings account after three months is the sum of the principal and interest earned:
Total savings after three months = $0 + $0 = $0
(b) Six months:
To calculate the amount of money Michael will have in his savings account after six months, we follow the same process as above.
Principal (initial savings) = $0 (since he is just starting)
Interest rate = 3% per month
Interest earned = $0 * 3% = $0
Total savings after six months = $0 + $0 = $0
(c) One year:
To calculate the amount of money Michael will have in his savings account after one year, we follow the same process as above.
Principal (initial savings) = $0 (since he is just starting)
Interest rate = 3% per month
Interest earned = $0 * 3% = $0
Total savings after one year = $0 + $0 = $0
Therefore, Michael will have $0 in his savings account at the end of each of the following periods: three months, six months, and one year.