Question

Rogério, a graphic artist, after paying all the expenses in his monthly budget, has a monthly net cash flow of $248. He has decided to add monthly savings to his budget in order to cover his health insurance co-pays and other expenses that come at odd times as listed below:
Predictable Expense

Amount
Medical exams, lab co-pays, health insurance co-pays

$640 every year
Auto maintenance

$35 per quarter
Auto registration

$225 per year


If Rogério leaves the cash flow in the checking account for all needs that arise, he runs the risk of not having the money for these very important future expenses. He has decided to make an automatic monthly transfer from his checking account to his savings accounts to cover these other predictable expenses.
How can he divide these future expenses into a monthly deposit that can be added to his monthly budget. How much will be left over each month that can be deposited into a general emergency fund?

Answer 1

The correct answers are:

He can deposit $83.75 into savings each month, and there will be $164.25 left over.

Explanation:

The expenses he has listed are:

Health insurance, co-pays, etc. at $640 per year.

Auto maintenance at $35 per quarter, which is 35(4) = 140 per year (there are four quarters in a year).

Auto registration at $225 per year.

This is a total of 640+140+225 = $1005 per year.

Dividing this into monthly amounts, we have

1005/12 = $83.75.

If he deposits this amount each month, he will have saved the required amount.

Depositing this amount into a savings account every month will leave him with $248 - $83.75 = $164.25 per month for an emergency fund.

Answer 2

He can divide these future expenses by separating future expenses. there will be  100 dollars left.