The Smiths spend 8% of their budget on entertainment. Their total budget this year is $2,000 more than last year, and this year they plan to spend $3,840 on entertainment. What was their total budget last year?

Let x be the total budget last year so that their total budget this year is x + 2000.
Since the Smiths spend 8% of their budget in entertainment and will spend $3840 this year, then we can write:
0.08(x + 2000) = 3840
Divide both sides by 0.08:
x + 2000 = 48000
Subtract 2000 from both sides:
x = 46000
Result: Smiths’ total budget last year was $46,000.