Week 1 Quiz

Scenario:

Alex is a 15-year-old who earns $100 per month from a part-time job. He wants to save for a bicycle that costs $600 so decides to put 50% of his earnings each month into his bicycle fund. How many months will it take Alex to save enough for the bicycle?

Answer:

Calculate the amount Alex saves each month from his part-time job:
- Total monthly earnings: $100
- Amount saved each month: 100 × 50% = 100 × 0.5 = $50
Determine the time needed to save for the bicycle with his job savings alone:
- Total needed for bicycle: $600
- Monthly savings: $50
- Time required: 600/50 = 12 months

It will take Alex 12 months to save enough for the bicycle with his job savings alone.

Follow-up question:

The bicycle is a 'want' so using the traditional 50-30-20 budgeting rule, what percentage of his earnings should Alex actually be saving for his bicycle fund?

Answer:

30% of Alex's earnings should be put into his bicycle fund. Instead, 50% of his earnings should be saved - not spent or put into any 'spending fund'.

Week 1 Quiz

Scenario: Alex is a 15-year-old who earns $100 per month from a part-time job. He wants to save for a bicycle that costs $600 so decides to put 50% of his earnings each month into his bicycle fund. How many months will it take Alex to save enough for the bicycle?

Scenario:

Alex is a 15-year-old who earns $100 per month from a part-time job. He wants to save for a bicycle that costs $600 so decides to put 50% of his earnings each month into his bicycle fund. How many months will it take Alex to save enough for the bicycle?