Finance

Donna and Sherman Terrel are preparing a budget for 2003. Donna is a systems analyst with an airplane manufacturer, and Sherman is working on a master's degree in educational psychology. The Terrels do not have any children or other dependents. Donna estimates her salary will be about $39,996 in 2003; Sherman expects to work only during the summer months, doing painting and remodeling work for a building contractor. He anticipates an income from those activities of $3000 a month in June, July, and August. Sherman does have a scholarship that pays his tuition and also provides $3,600 a year of which $2400 is payable in February and $1200 is payable in October. The Terrels don't expect to have any other income in 2003.

Donna and Sherman have listed their expected total expenses in 2003 as follows:

Housing (rent) $6,600

Transportation 5100

Food (includes dining out) 8100

Utilities 3000

Payroll taxes:

Donna 12,000

Sherman 1500

Insurance:

Life - payable in May 720

Auto - payable in January 1,500

Leisure and entertainment:

Vacation in May 1,200

All others 1,800

Clothing 1,500

Others $3,900