Question

Ben and his housemates signed a lease for an apartment for 12 months for $563 per month of which Ben agreed to pay $215 per month. Which of the following statements best gives the reasons that Ben’s rent payment is an essential (fixed) expense?
a.
It cannot be eliminated in a later budget, in order to save money.
b.
Living expenses have a higher priority than any other type of expense.
c.
The spender controls the amount of the rent by choice of apartment.
d.
It is by contract the same amount every month.

Answer 1

The statement that best gives the reasons that Ben's rent payment is an essential (fixed) expense is D. it is by contract the same amount every month. So, this is his rent, the amount of money that he is legally bound to pay every month in order to keep on living in that location. He has an agreement with his landlord to pay $215 each month and thus he has to do it.

Answer 2

The correct answer is D.