Question

Your gross pay is $1,878.96, net income is $1,196.34, and fixed expenses are $1,338.54. What is your discretionary income?
(1 point)
Responses

$540.42
$540.42

$682.62
$682.62

$0
$0

$142.20

Answer 1

To calculate discretionary income, you can use the following formula:

\[
\text{Discretionary Income} = \text{Net Income} - \text{Fixed Expenses}
\]

Using the numbers provided:

- Net Income = $1,196.34
- Fixed Expenses = $1,338.54

Now, plug in the values:

\[
\text{Discretionary Income} = 1,196.34 - 1,338.54 = -142.20
\]

Since discretionary income cannot be negative, it means you are operating at a deficit. The correct choice from your options, assuming it represents your deficit, would be:

**$0** (since discretionary income cannot be negative in the context of available funds), or you could consider the negative as an indication of the deficit situation.

However, if it were strictly about what the value reflects without context, the closest relevant answer would be **$0**.