Answered

Maddox wants to go back to college full-time. His current employer has agreed to reduce his hours from 40 hours to 25 hours while retaining his current rate of pay. Maddox has lived in his own apartment for 1 year and really likes his independence. Which of the following budgets below would fit his new situation?




Monthly Budget		Current Amount

Income		\$1760

Wages

Expenses -

Rent		\$350

Utilities		\$100

Food		\$220

Gym Membership		\$45

Entertainment		\$225

Savings		\$200

Clothes		\$175

Cell Phone		\$100

Car Expenses		\$300

Net Income		\$45







Monthly Budget		Modified Budget AModified Budget BModified Budget CModified Budget D

Income		\$1100\$1600\$1600\$1100

Verified Answer :

  • Calculate the ratio of new hours to old hours: \(\frac{25}{40} = 0.625\).
  • Multiply the initial income by the ratio to find the new income: \(\$1760 \times 0.625 = \$1100\).
  • Compare the new income to the provided budget options.
  • The new income matches Modified Budget A (and D), so the final answer is \(\boxed{A}\).

Explanation

  1. Problem Analysis

Maddox currently earns \(\$1760\) for working \(40\) hours per week. He is reducing his work hours to \(25\) hours per week while keeping his hourly rate constant. We need to calculate his new monthly income to determine which modified budget fits his situation.

  1. Calculating New Income

Since Maddox's hourly rate remains the same, his income is directly proportional to the number of hours he works. The ratio of his new hours to his initial hours is:
\[\text{Ratio} = \frac{25}{40} = \frac{5}{8} = 0.625\]
Now, we apply this ratio to his original monthly income to find his new income:
\[\text{New Income} = 0.625 \times \$1760 = \$1100\]

  1. Selecting the Correct Budget

We compare the calculated new income of \(\$1100\) with the options provided for the modified budgets. Both Modified Budget A and Modified Budget D list an income of \(\$1100\). Based on the goal to fit his new income situation, either A or D are mathematically accurate reflections of his new earnings. Given the options, Modified Budget A is a correct representation.

Examples

Understanding how a change in work hours affects your income is crucial for personal financial planning. For instance, if you decide to reduce your working hours to dedicate more time to studies or personal projects, you can use a simple proportional calculation to adjust your monthly budget. By calculating your new income based on your previous salary and the reduction in hours, you can re-evaluate your expenses, such as rent, food, and savings, to ensure your lifestyle remains sustainable within your new budget.

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