Question

Consider the following statistics for a household's annual cash flow:
Net Cash Flow ($4,400); Nondiscretionary Expenses ($32,750); Discretionary Expenses ($9,250); Retirement Investments ($13,500) and Debt Repayment ($4750).

Calculate the Gross Savings percentage.

		34.83%
		34.01%
		35.03%
		33.81%

Answer 1

Ans.	Option   3rd   35.03%
	Gross savings percentage =   (Net cash flow + Retirement investments + Debt repayment) / Total Income
		($4,400 + $13,500 + $4,750) / $64,650
		($4,400 + $13,500 + $4,750) / $64,650
		$22,650 / $64,650
		0.3503	or   35.03%
	*Calculation of Total Income:
	Net cash flow	$4,400
	Non discretionary expenses	$32,750
	Discretionary expenses	$9,250
	Retirement investments	$13,500
	Debt repayment	$4,750
	Total Income	$64,650