Question

when planning ones personal budget, a variable expense is what?
a. an expense that one does not have to make
b. an expense in which there are many options to choose from
c. an expense that may change in amount from month to month
d. an expense that does not have to be paid immediately

the rule of 72 is used to calculate what?
a. the amount of time it will take for an investment to double in value
b. the amount of money one should save by retirement
c. the amount of taxes owed for every $72 invested
d. the amount of credit one needs for a good credit report

Explanation:

First Question (Variable Expense)

To determine the correct answer for "a variable expense", we analyze each option:

• Option a: A non - mandatory expense is a discretionary expense, not variable. Eliminate.
• Option b: Having many choices doesn't define a variable expense. Eliminate.
• Option c: By definition, a variable expense changes in amount monthly (e.g., groceries, utility bills). This matches.
• Option d: A deferred expense (not paid immediately) is not the same as variable. Eliminate.

For the "Rule of 72" question:

• Option a: The Rule of 72 formula is $Time\ to\ double=\frac{72}{Interest\ rate\ (in\ \%)}$, so it calculates the time for an investment to double. Correct.
• Option b: The Rule of 72 has nothing to do with retirement savings amounts. Eliminate.
• Option c: It's not related to taxes on investments. Eliminate.
• Option d: It has no connection to credit scores. Eliminate.

Answer:

c. An expense that may change in amount from month to month

Second Question (Rule of 72)