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QUESTION 1

Celina Makau and her family want to save money for a holiday to Cape Town in December. Celina earns R12,000 a month and her husband, Zane, earns R14,300 a month. The family has to save R2,000 per month to ensure that they have sufficient money available to cover the expenses for the trip to Cape Town.

Table 1: Income and Expenditure for the household for August 2022.

[tex]\[
\begin{array}{|c|c|c|}
\hline
& \text{Income} & \text{Expenses} \\
\hline
\text{Celina Salary} & R12,000 & \\
\hline
\text{Zane Salary} & R14,300 & \\
\hline
\text{Water \& electricity} & \square & R500.00 \\
\hline
\text{Rent} & & R5,200.00 \\
\hline
\text{Groceries} & & R4,500.00 \\
\hline
\text{Car insurance} & & R875.00 \\
\hline
\text{Cell phone contract (2 phones)} & & R1,200.00 \\
\hline
\text{Medical Aid (family)} & & R2,400.00 \\
\hline
\text{School fees (2 children)} & & B \\
\hline
\text{Fuel} & & R2,350.00 \\
\hline
\text{Entertainment} & & R1,400.00 \\
\hline
\text{Car installment} & & R3,500.00 \\
\hline
\text{TOTAL} & A & R25,075 \\
\hline
\end{array}
\][/tex]

1.1 Refer to the table above and answer the questions that follow.

1.1.1 Briefly explain the difference between fixed and variable expenses. (2)

1.1.2 Determine the value of [tex]$A$[/tex], the total monthly income. (2)

1.1.3 List TWO variable expenses. (2)

1.1.4 How much does the family pay for the school fees for one child for the month? (4)

1.1.5 Will the Makau family be able to save the expected amount for a month for their holiday? Show all calculations. (3)

1.1.6 Mention ONE way in which the family can save more money for their holiday. (2)



Answer :

GinnyAnswer
### 1.1 Refer to the table above and answer the questions that follow.

#### 1.1.1 Briefly explain the difference between fixed and variable expenses.
Fixed expenses are consistent and do not change from month to month, such as rent and car installments. These are regular payments that are predictable. On the other hand, variable expenses fluctuate each month based on usage or consumption, such as groceries and entertainment. Variable expenses are less predictable and can vary depending on the family's discretionary spending.

#### 1.1.2 Determine the value of A, the total monthly income.
The total monthly income [tex]\(A\)[/tex] is the sum of Celina's and Zane's salaries:
[tex]\[ \text{Celina's salary} + \text{Zane's salary} = R12000 + R14300 = R26300 \][/tex]
So, the value of [tex]\(A\)[/tex] is R26300.

#### 1.1.3 List TWO variable expenses.
Two variable expenses from the table are:
1. Groceries
2. Entertainment

#### 1.1.4 How much does the family pay for the school fees for one child for the month?
First, let's determine the total school fees (B) for two children by calculating the difference between the total expenses and the sum of all other expenses:
[tex]\[ \text{Total expenses} - (\text{Water \& electricity} + \text{Rent} + \text{Groceries} + \text{Car insurance} + \text{Cell phone contract} + \text{Medical aid} + \text{Fuel} + \text{Entertainment} + \text{Car installment}) \][/tex]
[tex]\[ R25075 - (R500 + R5200 + R4500 + R875 + R1200 + R2400 + R2350 + R1400 + R3500) = R25075 - R21925 = R3150 \][/tex]
The total school fees for two children are [tex]\(R3150\)[/tex]. Therefore, the school fees for one child for the month are:
[tex]\[ \frac{R3150}{2} = R1575 \][/tex]

#### 1.1.5 Will the Makau family be able to save the expected amount for a month for their holiday? Show all calculations.
To determine if the family can save the expected amount ([tex]\(R2000\)[/tex] per month), we need to find out how much money is left after all expenses are paid:
[tex]\[ \text{Total income} - \text{Total expenses} = R26300 - R25075 = R1225 \][/tex]
The family has [tex]\(R1225\)[/tex] left after covering their expenses. Since this amount is less than the required [tex]\(R2000\)[/tex] for monthly savings, the family will not be able to save the expected amount:
[tex]\[ R1225 < R2000 \][/tex]
Thus, the Makau family will not be able to save the [tex]\(R2000\)[/tex] for their holiday.

#### 1.1.6 Mention ONE way in which the family can save more money for their holiday.
One way the family can save more money for their holiday is by reducing their variable expenses. For example, they could cut down on entertainment expenses or opt for less expensive groceries. This would help them save more towards their holiday fund.

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