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(a)
The percentage of family’s expenses that fit in their needs category.
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Answer to Problem 35P
The percentage of family’s expenses that fit in their needs category is
Explanation of Solution
Given:
The after tax income of household is
The monthly expenses of the family are as shown below.
Category | Monthly expenses |
House payment | |
Gasoline | |
Phone/internet/TV | |
Eating out | |
Home maintenance | |
Insurance and taxes | |
Groceries | |
Utilities | |
Car payment | |
Saving | |
Vacation & entertainment |
Table (1)
Calculations:
The family’s expenses which fit in needs category are house payment, gasoline, home maintenance, car payment, insurance and taxes, groceries and utilities.
Calculate the percentage of family’s expenses that fit in needs category.
Conclusion:
Thus, the percentage of family’s expenses that fit in their needs category is
(b)
The percentage of family’s expenses that fit in the saving category.
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Answer to Problem 35P
The percentage of family’s expenses that fit in the saving category is
Explanation of Solution
Calculations:
The family’s expense which fit in saving category is Saving.
Calculate the percentage of family’s expenses fitting in saving category.
Conclusion:
Thus, the percentage of family’s expenses that fit in the saving category is
(c)
The percentage of family’s expenses that fit in the wants category.
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Answer to Problem 35P
The percentage of family’s expenses that fit in the wants category is
Explanation of Solution
Calculations:
The family’s expense which fit in wants category is Eating out, Phone/internet/TV, Vacation and entertainment.
Calculate the percentage of family’s expenses fitting in wants category.
Conclusion:
Thus, the percentage of family’s expenses that fit in the wants category is
(d)
The annual property tax paid as a part of house payment.
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Answer to Problem 35P
The annual property tax paid as a part of house payment is
Explanation of Solution
Given:
The amount paid for fire insurance is
The mortgage payment is
Concept used:
Write the expression for mortgage payment.
Here, the mortgage payment is M, house payment is
Calculations:
Calculate the annual property tax.
Substitute
Conclusion:
Thus, the annual property tax paid as a part of house payment is
(e)
The before tax income of the family.
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Answer to Problem 35P
The before tax income of the family is
Explanation of Solution
Given:
The family pays
Concept used:
Write the expression for before tax income.
Here, after tax income is ATI and tax paid is T.
Calculations:
Calculate the total tax paid.
Calculate the before tax income.
Substitute
Conclusion:
Thus, the before tax income of the family is
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Chapter 12A Solutions
ENGR.ECONOMIC ANALYSIS
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