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Performance Task: Financial LiteracyComplete each task, reading directions carefully as you go. Be sure to show all work where indicated. Step 1: Analyzing components of a BudgetBefore a detailed family budget can be created, your financial planner has advised you to examine the important aspects that affect a budget, such as income, taxes, saving and expenses. Work through the following questions to start thinking about these aspects of budgeting.As a student, you are able to earn extra money by assisting your neighbors with odd jobs. If you charged $10.25 an hour for your assistance, about how many hours would you need to work to earn $8,425? Show your work. Imagine that you earned $8,425 in one year. If the government enforces a 15% income tax, how much money would you owe in taxes at the end of the year? Show your work. Your parents have been advised to save 5% of their income for your college education, which would include money for housing, tuition, books and fees. How much would your parents have saved in one year, following the recommended 5%, if they had an average household income of $48,948? Show your work.As a smart consumer, you are always on the lookout for sales, coupons and rebates. While shopping for new clothes, you notice that one particular brand of shirts is on sale for 20% off the original price. You also have a coupon for $10 off a $40 purchase. Coupons are applied after the 20% discount is taken. If each shirt originally costs $17.99, how many shirts would you need to buy to be able to use your coupon? Show your work.What would be the total cost of purchasing the number of shirts needed to use your coupon – after your coupon is applied and a 7.5% sales tax is charged on the purchase? Show your work.Step 2: Calculating Monthly ExpensesThe second step to building a family budget is to outline your expenses in greater detail, itemizing fixed and variable expenses. Suppose the table below shows your family’s monthly expenses by category. Fixed expenses are expenses that do not change from month to month, and variable expenses are expenses that can fluctuate from month to month. Complete all of the columns in the chart – labeling expenses as fixed or variable and calculating the average monthly cost, yearly cost and percent of yearly budget (rounded to the nearest tenth of a percent).ExpenseFixed or variable expense?Average monthly costYearly costPercent of yearly budget (rounded)Income taxFixed$400$4,800$4,800$48,900=9.9%Housing$950Food$7,800ClothingVariable$75TransportationFixed$6,000Insurance & Medical$1,200Entertainment$100$1,200Emergency fundFixed$50Savings for collegeFixed$600Savings for retirement$100$1,200Total$4,075$48,900100%Choose an example of a fixed expense and an example of a variable expense, and explain why they are classified that way.Step 3: Creating a Balanced Family BudgetUsing the online family budget estimator at , calculate the monthly expenses for a family living in Mitchell. You can choose a one- or two-parent home and select 0, 1 or 2 children. List the expenses below, and state the number of parents and children in your home.Calculate the minimum hourly wage needed to cover monthly expenses for your family. First of all, write down if the parents in the household work part-time or full-time. Then, assume that a full-time employee works four 40-hour weeks per month and a part-time employee works four 20-hour weeks per month when determining the hourly wage needed for each.Keeping all other criteria the same, add a child to your family and list the new monthly expenses below. How does an additional child impact the family budget and hourly wage? Which category was least affected by this change? Explain why you think there was little impact to this category. ................
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