Question
Question
The Cumberland family wants to move into a larger apartment. The apartment costs $1,500 a month. They currently earn take-home pay of $4,000. Evaluate their budget. Can they afford the larger apartment on the current budget?
A table showing Fixed Expense Categories vs Flexible Expense Categories.
Fixed Expense Categories and Amounts
Rent $1,000
Utilities $200
Car Insurance $500
Car Payments $500
Flexible Expense Categories and Amounts
Groceries $600
Entertainment $300
Dining Out $400
Clothing $250
Responses
Yes
Yes
No
The Cumberland family wants to move into a larger apartment. The apartment costs $1,500 a month. They currently earn take-home pay of $4,000. Evaluate their budget. Can they afford the larger apartment on the current budget?
A table showing Fixed Expense Categories vs Flexible Expense Categories.
Fixed Expense Categories and Amounts
Rent $1,000
Utilities $200
Car Insurance $500
Car Payments $500
Flexible Expense Categories and Amounts
Groceries $600
Entertainment $300
Dining Out $400
Clothing $250
Responses
Yes
Yes
No
Answers
GPT-4o mini
To evaluate whether the Cumberland family can afford the larger apartment, we need to analyze their current budget.
**Current Monthly Income:**
- Take-home pay = $4,000
**Current Fixed Expenses:**
- Rent = $1,000
- Utilities = $200
- Car Insurance = $500
- Car Payments = $500
- **Total Fixed Expenses** = $1,000 + $200 + $500 + $500 = $2,200
**Current Flexible Expenses:**
- Groceries = $600
- Entertainment = $300
- Dining Out = $400
- Clothing = $250
- **Total Flexible Expenses** = $600 + $300 + $400 + $250 = $1,550
**Total Current Expenses:**
- Total Expenses = Fixed Expenses + Flexible Expenses = $2,200 + $1,550 = $3,750
**Remaining Income After Current Expenses:**
- Remaining = Take-home pay - Total Expenses = $4,000 - $3,750 = $250
Now, let's evaluate the affordability of the new apartment costing $1,500 per month.
**New Fixed Expenses with Larger Apartment:**
- New Rent = $1,500
- Utilities (assuming no change) = $200
- Car Insurance = $500
- Car Payments = $500
- **New Total Fixed Expenses** = $1,500 + $200 + $500 + $500 = $2,700
**Total Expenses with Larger Apartment:**
- Total Flexible Expenses remain the same at $1,550.
- **New Total Expenses** = New Fixed Expenses + Flexible Expenses = $2,700 + $1,550 = $4,250
**Remaining Income After New Total Expenses:**
- Remaining = Take-home pay - New Total Expenses = $4,000 - $4,250 = -$250
Since their remaining income is negative (-$250), the Cumberland family cannot afford the larger apartment under their current budget.
**Final Answer: No**
**Current Monthly Income:**
- Take-home pay = $4,000
**Current Fixed Expenses:**
- Rent = $1,000
- Utilities = $200
- Car Insurance = $500
- Car Payments = $500
- **Total Fixed Expenses** = $1,000 + $200 + $500 + $500 = $2,200
**Current Flexible Expenses:**
- Groceries = $600
- Entertainment = $300
- Dining Out = $400
- Clothing = $250
- **Total Flexible Expenses** = $600 + $300 + $400 + $250 = $1,550
**Total Current Expenses:**
- Total Expenses = Fixed Expenses + Flexible Expenses = $2,200 + $1,550 = $3,750
**Remaining Income After Current Expenses:**
- Remaining = Take-home pay - Total Expenses = $4,000 - $3,750 = $250
Now, let's evaluate the affordability of the new apartment costing $1,500 per month.
**New Fixed Expenses with Larger Apartment:**
- New Rent = $1,500
- Utilities (assuming no change) = $200
- Car Insurance = $500
- Car Payments = $500
- **New Total Fixed Expenses** = $1,500 + $200 + $500 + $500 = $2,700
**Total Expenses with Larger Apartment:**
- Total Flexible Expenses remain the same at $1,550.
- **New Total Expenses** = New Fixed Expenses + Flexible Expenses = $2,700 + $1,550 = $4,250
**Remaining Income After New Total Expenses:**
- Remaining = Take-home pay - New Total Expenses = $4,000 - $4,250 = -$250
Since their remaining income is negative (-$250), the Cumberland family cannot afford the larger apartment under their current budget.
**Final Answer: No**