The formula to calculate the 20-30-50 Rule is:
\(B = \text{ATI} \times R\)
Where:
The 20-30-50 Rule is a budgeting guideline that suggests allocating 20% of your after-tax income to savings, 30% to discretionary spending, and 50% to necessities. This rule helps individuals manage their finances effectively by ensuring a balanced distribution of income.
Example 1:
Calculation:
20%: \(B = 4000 \times 0.20 = 800\)
30%: \(B = 4000 \times 0.30 = 1200\)
50%: \(B = 4000 \times 0.50 = 2000\)
Example 2:
Calculation:
20%: \(B = 5000 \times 0.20 = 1000\)
30%: \(B = 5000 \times 0.30 = 1500\)
50%: \(B = 5000 \times 0.50 = 2500\)
