Nancy has a gross income of $47 000,disposable income of $40 000,discretionary income of $4000 and saves $8000 a year.Her savings rate is

Question

Quizplus · Accepted Answer

Nancy's savings rate can be calculated as total savings divided by gross income multiplied by 100%. 
Total savings = Disposable income - Discretionary income - Annual savings 
Total savings = $40 000 - $4000 - $8000 = $28 000 
Savings rate = ($28 000 / $47 000) x 100% = 59.57...% 
Rounding off to the nearest whole number, the savings rate is 60%. 
Therefore, the best choice is D, which corresponds to a savings rate of 20%.

Nancy Has a Gross Income of $47 000,disposable Income of $40