Kendra is working on her financial plan and lists all of her income and expenses in the spreadsheet below.
| | A | B |
|---|----------------------------|----------|
| 1 | Net pay | $2,300.0 |
| 2 | Interest earned on savings | $20.0 |
| 3 | Mortgage | $800.0 |
| 4 | Homeowner's Association fee| $120.0 |
| 5 | Electric | $90.0 |
| 6 | Water/Sewer | $45.0 |
| 7 | Cable/Internet | $95.0 |
| 8 | Cell phone | $80.0 |
| 9 | Insurance | $275.0 |
| 10| Groceries | $520.0 |
What is Kendra's net cash flow?
A. $295
B. $285
C. $275
D. $255
Answer (2)
Calculate total income: $2300 + $20 = $2320 .
Calculate total expenses: $800 + $120 + $90 + $45 + $95 + $80 + $275 + $520 = $2025 .
Calculate net cash flow: $2320 − $2025 = $295 .
Kendra's net cash flow is $295 .
Explanation
Identify Income and Expenses First, we need to identify Kendra's income and expenses from the given table. Her income consists of her net pay and interest earned on savings. Her expenses include mortgage, homeowner's association fee, electric, water/sewer, cable/internet, cell phone, insurance, and groceries.
Calculate Total Income Next, we calculate Kendra's total income by adding her net pay and interest earned on savings: T o t a l I n co m e = N e tP a y + I n t eres tE a r n e d = $2300 + $20 = $2320
Calculate Total Expenses Then, we calculate Kendra's total expenses by adding all her listed expenses: T o t a lE x p e n ses = $800 + $120 + $90 + $45 + $95 + $80 + $275 + $520 = $2025
Calculate Net Cash Flow Now, we calculate Kendra's net cash flow by subtracting her total expenses from her total income: N e tC a s h Fl o w = T o t a l I n co m e − T o t a lE x p e n ses = $2320 − $2025 = $295
Final Answer Therefore, Kendra's net cash flow is $295 .
Examples
Understanding net cash flow is crucial for managing personal finances. For example, if Kendra wants to save for a down payment on a new car, knowing her net cash flow helps her determine how much money she can realistically save each month. By tracking income and expenses, she can make informed decisions about her spending habits and adjust her budget to reach her financial goals more effectively. This also allows her to plan for unexpected expenses and build a financial safety net.
Kendra's net cash flow is calculated by subtracting her total expenses from her total income. After summing her income ($2,320) and expenses ($2,025), the result is a net cash flow of $295. The correct answer is A. $295.
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