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Look at the monthly budget below:

| Category | Amount |
|----------------|-----------|
| Net income | \[tex]$600 |
| Total income | \$[/tex]600 |
| Rent | -\[tex]$300 |
| Train pass | -\$[/tex]30 |
| Total fixed | -\[tex]$330 |
| Food | -\$[/tex]100 |
| Clothing | -\[tex]$40 |
| Discretionary | -\$[/tex]50 |
| Total variable | -\[tex]$190 |
| Savings | \$[/tex]80 |

Next month, Tokuf's monthly net income will increase to \[tex]$650. If he increases his savings to \$[/tex]110 a month, how much can he increase his discretionary spending?

A. \[tex]$20
B. \$[/tex]10
C. \[tex]$40
D. \$[/tex]30



Answer :

GinnyAnswer
To determine how much Tokuif can increase his discretionary spending, let's analyze the changes in his budget step by step.

1. Identify the current and new net incomes:
- Current net income: [tex]$600 - New net income: $[/tex]650

2. Determine the change in net income:
[tex]\[ \text{Change in net income} = \text{New net income} - \text{Current net income} = 650 - 600 = 50 \][/tex]

3. Identify the current and new savings:
- Current savings: [tex]$80 - New savings: $[/tex]110

4. Determine the change in savings:
[tex]\[ \text{Change in savings} = \text{New savings} - \text{Current savings} = 110 - 80 = 30 \][/tex]

5. Calculate the possible increase in discretionary spending:
- The increase in net income can be used for either increased savings or increased discretionary spending.

6. Determine how much of the net income increase is allocated to savings:
[tex]\[ \text{Portion of net income increase allocated to savings} = 30 \][/tex]

7. Calculate the remaining amount from the net income increase after increasing savings:
[tex]\[ \text{Remaining amount} = \text{Change in net income} - \text{Change in savings} = 50 - 30 = 20 \][/tex]

Therefore, Tokuif can increase his discretionary spending by [tex]\( \boxed{20} \)[/tex] dollars.

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