International Baccalaureate (IB) Practice Exam

How is the amount saved typically determined each month?

1. It equals the total income

2. It comes from leftover funds after spending

3. It is a fixed percentage of salary

4. It is mostly unpredictable

The correct answer is: It comes from leftover funds after spending

The amount saved each month is often determined by the leftover funds after spending. This approach involves first accounting for all necessary expenses, such as bills, groceries, and other commitments, and then calculating how much money remains. The savings are effectively any surplus after these mandatory expenditures have been taken care of. This method is practical for many individuals as it takes into consideration their actual financial situation. It reflects a common behavior in personal finance, where saving is contingent upon one's lifestyle choices and spending habits. In contrast, the other options outline different scenarios. The total income does not directly indicate how much is saved, as income alone does not account for expenses. A fixed percentage of salary can be a method of saving, but it is not universally applied and does not reflect the variability in personal finance management. The notion that savings are unpredictable undermines the idea that many people can often estimate their leftover funds based on a set budget or spending pattern.