JOURNAL Name 5 ways you could balance your budget if your cash flow was negative.

Math Driven Decisions Unit 1 Day 5 Notes

Example 1 – Cash Flow Brianna is creating a budget. The expenses she pays monthly are $700 for rent, $120 for gas in her car, $140 for health insurance, $75 for auto insurance, $25 for renters’ insurance, $110 for her cell phone, $100 for utilities, about $300 for groceries and about $250 for entertainment. In addition, over the entire year, she spends $12,000 for college expenses, about $1000 on gifts for her family and friends, and about $1500 for vacations at spring and winter break, about $800 on clothes, and $600 in gifts to charity. Her income consists of a monthly, after-tax paycheck of about $1600 and a $3000 scholarship that she received at the beginning of the school year. Find her total monthly cash flow.

Example 2 – Adjusting Your Budget Gatorade is sold in an 8-pack for about $6. I drink an average of 2 Gatorades a day. How much money could I save over the course of a year if I drank water instead of Gatorade?

Example 3 – Which Decision is Cheaper? Brian lives with his parents in Idaho Falls and commutes to Pocatello 5 days a week for work. Pocatello is 52 miles from Idaho Falls. He is wondering if it would be cheaper for him to rent his own apartment in Pocatello for $600 a month or if it would be cheaper for him to commute. His car gets 35 mpg of gasoline, and the average gas price is $3.65 per gallon. Every 3000 miles, Brian will have to get his car serviced, which will cost about $50 each time. Over the course of a year, how much will it cost for Brian to commute? How much will it cost for him to rent?

Example 4 - Which Decision is Cheaper? If you stay in your home town, you can go to Concord College at a reduced tuition of $3000 per year and pay $800 per month in rent. Or you can leave home, go to Versalia College on a $10,000 scholarship, where tuition is $16,000 a year. You will pay $350 per month to live in a dormitory. You will also pay $2000 per year to travel back and forth from Versalia College. Assuming all other factors are equal, which is the less expensive choice on an annual basis?

Example 5 – Payback Period Let’s say you can’t decide whether to become a teacher or a pharmacist and you want to base your decision solely on money. If you decide to become a teacher, you must go to 4 years of school, which will cost you about $12,000 a year. After graduating, you will be paid $35,000 a year. If you decide to become a pharmacist, you must go to 8 years of school. The first 4 years will cost you about $12,000 a year, and the last 4 years will cost you about $20,000 a year. When you graduate, your job will pay you $110,000 a year. What is the payback period for being a pharmacist?

Example 6 – Payback Period Millie is looking to buy a new car. Look at her options and tell her how long it will take for the more expensive car to actually be cheaper. Millie drives an average of 80 miles per week, and the cost of gas is on average $2.50 per gallon. Option 1: Cost of car - $10,000 Estimated Annual Repairs: $750 Gas Mileage: 25 mpg Servicing Fee: $50 every 5000 miles Option 2: Cost of car - $15,000 Estimated Annual Repairs: $100 Gas Mileage: 30 mpg Servicing Fee: $60 every 5000 miles