Question

Alice makes $20,504 annually. what is the maximum monthly rent that she can afford to pay?

Answer 1

The correct answer for this question is this one: "B. $478" Alice makes $20,504 annually. The maximum monthly rent that she can afford to pay is B. $478
There exists the same question from other source that has the following choices:
A. $5,741
B. $478
c. $564
D. $427

Answer 2

Amount that Alice earns annually= $ 20, 504

We will use
`(28)/(36)` rule here, which states that , 28 % of your monthly income should be used for housing finances, including rent also, and 36 % of your monthly income should be used for debt purposes.

Amount earned by Alice monthly

`=(20,504)/(12)\\\\=1708.66`

28% of 1708.66

`=(28)/(100)* 1708.66\\\\=(47842.66)/(100)\\\\=478.43`

Maximum monthly rent that Alice can afford = $478(approx)