Answer:
Option C $970 is the new clothing budget.
Step-by-step explanation:
The Chambers family has a net monthly income = $6,500
Chambers family budget for Clothing = 18% of net income
= (18/100) × 6500
= 0.18 × 6500 = $1,170.00
The budget of Chambers family is $1,170.00 per month, Now the family decides to reduce its clothing budget by $200 a month.
Therefore, we subtract $200 from his old budget to get new clothing budget.
1,170 - 200 = $970.00
Now the new clothing budget of the family is $970.
