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Suppose your after-tax annual income is $41,000. Your annual expenses are $14,000 for rent, $5000 for food and household expenses, $900 for interest on credit cards, and $7100 for entertainment, travel, and other. Answer questions a through c. a. Do you have a surplus or a deficit? Explain. A. There is a surplus because the sum of the expenses is greater than the income. B. There is a deficit because the sum of the expenses is less than the income. C. There is a deficit because the sum of the expenses is greater than the income. D. There is a surplus because the sum of the expenses is less than the income. b. Next year, you expect to get a 2% raise. You think you can keep your expenses unchanged, with one exception: You plan to spend $8000 on a car. Explain the effect of this purchase on your budget. O A. The purchase increases your surplus. OB. The purchase puts you into debt. O C. The purchase reduces your surplus. c. As in part b, assume you get a 2% raise for next year, but instead decide to not purchase a car. If you can limit your expenses to a 1% increase (over the prior year), could you afford $9000 in tuition and fees without going into debt? Yes, you can afford the tuition and fees without going into debt. No, you cannot afford the tuition and fees without going into debt

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