The Harts spend 30% of their disposable income on housing, 5% on medical expenses, 25% on food, 10% on clothing, 14% on loan repayments, and 8% on entertainment. How much of their disposable income is available for saving and investment? (Show all work.)
What will be an ideal response?
The disposable income is 100%. The total outlays equal 92%, which is calculated by adding 30%, 5%, 25%, 10%, 14%, and 8%. Therefore, the total disposable income available for saving and investment = 100% - 92% = 8%.
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