3
QuizMultiple Choice

Budget — Test

Question 3 • Financial Math

Which strategy would help Amrom increase his net worth by using his monthly income effectively?

Answer
A
spend more than his income on non-essential expenses to maintain a high standard of living
B
use his income to finance a new car by taking out an additional loan
C
allocate a portion of his income to make regular contributions to his retirement account
D
spend his monthly income on purchasing more credit card reward programs

Explanation

Net worth increases when assets grow or debts decrease. Regular contributions to a retirement account build savings over time, so allocating part of his income to those contributions can increase Amrom’s assets. Spending more than he earns or taking on another loan can increase debt, while buying credit card reward programs does not reliably build wealth.

AI-written and checked against the verified answer.

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