Answer:
He has used the highest recommended percentages to calculate the amounts for the three categories.
Step-by-step explanation:
Monthly net earnings of Jim = $1600
He has budgeted Housing = $576
Food = $272
Transportation = $320
As no recommended percentage of food and housing is given so we can consider the ideal percentage. Ideally, a maximum of 30 to 35 percent should be spent on housing. And a maximum of 25 to 30% on food and transportation combined.
Here lets calculate 35% of housing, 0.35*1600= $560
And 30% of food and transportation , 0.30*1600=480
But Jim is spending $576 on housing and $592 on food and transportation. Comparing with the ideal maximum limit, we can see that Jim's budget has crossed the maximum limit.
So, the correct option is - He has used the highest recommended percentages to calculate the amounts for the three categories.
