Question 5 (5 points) Suppose you make \( \$ 2542 \) a month and your car payment is \( \$ 453 \) a month. What percent of your monthly pay goes to pay your car payment? Round final decimal answers to two decimal places where necessary.
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To determine what percentage of your monthly pay goes towards your car payment, you can use the formula: \[ \text{Percentage} = \left(\frac{\text{Car Payment}}{\text{Monthly Pay}}\right) \times 100 \] Plugging in the numbers, \[ \text{Percentage} = \left(\frac{453}{2542}\right) \times 100 \approx 17.80\% \] So, approximately \( 17.80\% \) of your monthly pay goes to your car payment. Now, remember, budgeting is crucial! To avoid overextending yourself on vehicle expenses, it's a good rule of thumb to keep your car payment below 15% of your monthly income. It helps ensure you're not sacrificing other necessary expenses for that shiny ride.