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# Based on the following information, prepare a monthly and yearly budget for Brandy and Kenneth Harbour. Use Figure 8.2 as a model.Average IncomeNet paychecks $=\ 1,800$ monthlyInterest on savings $=\ 50$ monthlyAverage Monthly Expenses$\begin{array}{lr}\text { Rent payment } & \ 400 \\ \text { Utilities } & 120 \\ \text { Gasoline } & 100 \\ \text { Insurance } & 150 \\ \text { Groceries } & 200 \\ \text { Clothing } & 100 \\ \text { Car payment } & 210 \\ \text { Car maintenance } & 50 \\ \text { Cell phone } & 40 \\ \text { Entertainment and recreation } & 200\end{array}$Cash SurplusSavings To be determined$\begin{array}{lr}\text { Investment fund } & 60 \\ \text { Miscellaneous } & 120\end{array}$

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We have to prepare a monthly and yearly budget for Brandy and Kenneth Harbour.

In preparing a budget, we need to estimate the income and expenses then get the difference between the two. We have a cash surplus if income exceeds expenses, we can allocate this surplus to savings and investments. We have a cash deficit if expenses exceed income, we need to adjust our expenses or find ways to increase our income.

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