Question

Alexandra's gross annual salary is $38,556. What is the maximum amount of rent she can afford to pay? Round your answer to the nearest dollar.

A. $900
B. $1220
C. $1324
D. $1607

Answer 1

Answer: $900

Explanation:

Step 1.

Multiply annual salary by 28%

28% to a decimal is 0.28

38556 x 0.28= 10795.68

Step 2.

Divide by 12 to find the monthly amount

10795.68/12= 899.64

Answer 2

A.$900

Explanation:

To find how much Alexandra can afford to pay for monthly rent, we first need to find her monthly income.

Monthly Income = $38,556/12

Monthly Income = $3,213

Now since we have the 28/36 rule where a household should only spend a maximum amount of 28% of the gross monthly income we need to multiply the monthly income by 0.28.

Monthly Rent = $3,213 * 0.28

Monthly Rent = $899.64 or $900