Problem 98 - Prealgebra

Question

John has a decision to make regarding his employment. He currently has a job at Taco Loco in Fortuna. After taxes, he makes about \(\$ 9.20\) per hour and works about 168 hours a month. He currently pays \(\$ 400\) per month for rent. He has an opportunity to move to Santa Rosa and take a job at Mi Ultimo Refugio which would pay \(\$ 10.30\) per hour after taxes for 168 hours a month, but his rent would cost \(\$ 570\) per month. a) After paying for housing in Fortuna, how much does he have left over each month for other expenditures? b) After paying for housing in Santa Rosa, how much would he have left over each month for other expenditures? c) For which job would he have more money left after paying rent and how much would it be?

Step-by-Step Solution

Answer

John has more money left in Santa Rosa, with $14.80 more after rent.

Step 1: Calculate Monthly Earnings in Fortuna

John earns $9.20 per hour and works 168 hours each month in Fortuna. Calculate his total monthly earnings: \[ 9.20 \times 168 = 1545.60 \, \text{dollars} \]

Step 2: Calculate Remaining Money in Fortuna

After earning \(1545.60 per month, he spends \)400 on rent. Calculate the remaining amount: \[ 1545.60 - 400 = 1145.60 \, \text{dollars} \]

Step 3: Calculate Monthly Earnings in Santa Rosa

At Mi Ultimo Refugio in Santa Rosa, he would earn $10.30 per hour for 168 hours. Calculate his total monthly earnings: \[ 10.30 \times 168 = 1730.40 \, \text{dollars} \]

Step 4: Calculate Remaining Money in Santa Rosa

After earning \(1730.40 per month, he would spend \)570 on rent. Calculate the remaining amount: \[ 1730.40 - 570 = 1160.40 \, \text{dollars} \]

Step 5: Compare Money Left After Rent

In Fortuna, he would have \(1145.60 left after paying rent. In Santa Rosa, he would have \)1160.40 left. The difference is: \[ 1160.40 - 1145.60 = 14.80 \, \text{dollars} \] This indicates he would have more money left in Santa Rosa.

Key Concepts

Monthly Earnings Calculation

Understanding monthly earnings is crucial when evaluating job offers. To calculate it, you need to know two things:

• The hourly wage
• The number of hours worked per month

For example, John earns \(9.20 per hour at Taco Loco. He works 168 hours each month. Therefore, his earnings calculation is:\[ 9.20 \times 168 = 1545.60 \text{ dollars} \]Similarly, if he moves to Mi Ultimo Refugio, his pay increases to \)10.30 per hour. The same number of working hours applies, leading to his monthly earnings calculation:\[ 10.30 \times 168 = 1730.40 \text{ dollars} \]Calculating earnings accurately helps in comparing different job offers and making informed decisions.

Financial Decision Making

Financial decision making involves evaluating income and expenses to determine the best course of action. John's scenario includes two locations with different income and expense setups. Each decision's impact must be weighed.
John's monthly income in Fortuna is \(1545.60, but he spends \)400 on rent. His leftover income is:\[ 1545.60 - 400 = 1145.60 \text{ dollars} \]In Santa Rosa, he would earn \(1730.40, with a rent of \)570, leaving:\[ 1730.40 - 570 = 1160.40 \text{ dollars} \]The goal is to maximize the amount left after covering essential expenses like rent. Doing this involves careful comparison of the potential to save or spend.

Comparison of Costs

To make the best financial decision, comparing the costs in both living scenarios is vital. Key differences can impact financial stability and growth over time. John must evaluate both scenarios:

• In Fortuna, his remainder after rent is \(1145.60.
• In Santa Rosa, his remainder after rent is \)1160.40.

By calculating the differences:\[ 1160.40 - 1145.60 = 14.80 \text{ dollars} \]We see he has $14.80 more in Santa Rosa. Even small differences can add up over time, hence choosing Santa Rosa improves his financial situation, providing more disposable income.
This comparison helps John see which job provides better financial security after accounting for living expenses.