First, we need to determine how much of your money is discretionary.
We can use the formula:
#d = r - (f * r)#
Where:
#d# is the discretionary money: What we are solving for.
#r# is the realized income: $2,847.69 for this problem.
#f# is the percent of money for fixed expenses: 36% for this problem. "Percent" or "%" means "out of 100" or "per 100", Therefore 36% can be written as #36/100#.
We can substitute and calculate #d# as:
#d = $2847.69 - (36/100 * $2847.69)#
#d = $2847.69 - ($102516.84)/100#
#d = $2847.69 - $1025.17#
#d = $1822.52#
The formula for how much is saved is:
#s = v * d#
Where:
#s# is the amount of money saved: What we are solving for in this equation.
#v# is the percent of money for savings: 40% for this problem. "Percent" or "%" means "out of 100" or "per 100", Therefore 40% can be written as #40/100#.
#d# is the amount of discretionary money from above: $1,822.52
We can substitute and calculate #s# as:
#s = 40/100 * $1822.52#
#s = $72900.8/100#
#s = $729.01#
Every month you should save: $729.01
