Vincent Maruggi, an MBA student at Northern Massachusetts University, has been having problems balancing his checkbook. His monthly income is derived from a graduate research assistantship; however, he also makes extra money in most months by tutoring undergraduates in their quantitative analysis course. His chances of various income levels are shown here:
MONTHLY INCOME* ($) PROBABILITY
350 ............ 0.40
400 ............ 0.20
450 ............ 0.30
500 ............ 0.10
*Assume that this income is received at the beginning of each month.
Maruggi's expenditures also vary from month to month, and he estimates that they will follow this distribution:
MONTHLY EXPENSES ($) PROBABILITY
300 ............ 0.10
400 ............ 0.45
500 ............ 0.30
600 ............ 0.15
He begins his final year with $600 in his checking account. Simulate the entire year (12 months) and discuss Maruggi's financial picture.