read the situation below and select the best answer to the question.\n\npeople choose different ways to pay…
read the situation below and select the best answer to the question.\n\npeople choose different ways to pay their credit card charges. juan pays off his entire credit card bill each month so he wont have additional charges. donyelle only pays the minimum required amount each month. celeste pays $100 each month and tries to limit her card purchases.\n\nq. which of these payment methods is an example of a fixed expense?\na. juans method\nb. donyelles method\nc. celestes method\nd. both celestes and donyelles method
Answer
Brief Explanations:
A fixed expense is a cost that remains constant in amount over a specific period, regardless of changes in activity or usage. In the context of personal finance, it is a predetermined amount paid regularly.
- Juan's method involves paying the entire bill, which fluctuates based on his monthly spending (variable).
- Donyelle's method involves paying the minimum required amount, which is typically a percentage of the balance and changes as the balance changes (variable).
- Celeste's method involves paying exactly $100 every month. Because this amount is set and does not change regardless of her balance or purchases, it functions as a fixed expense in her budget.
Answer:
C. Celeste's method