Question

If you have a buying power of $200,000, and it costs $180 per square foot to build a house, how big of a house per square foot can you afford to build? Will the home be big or small?

a) 1,111 square feet; Big
b) 1,000 square feet; Big
c) 1,100 square feet; Small
d) 1,000 square feet; Small

Answer 1

The size of the house that can be built with a buying power of $200,000, at a cost of $180 per square foot, is 1,111 square feet, which is moderately-sized or considered small in some areas.

Step-by-step explanation:

To find out how big of a house can be built with a buying power of $200,000 when it costs $180 per square foot to build, you simply divide the total buying power by the cost per square foot. Here's the calculation:

• Buying Power: $200,000
• Cost per square foot: $180
• Maximum affordable square footage = Buying Power ÷ Cost per square foot
• Maximum affordable square footage = $200,000 ÷ $180
• Maximum affordable square footage = 1,111.11 square feet

Thus, the maximum square footage that can be afforded is 1,111 square feet, which gets rounded down to 1,111 since you cannot have a fraction of a square foot. So, the correct answer is (a) 1,111 square feet; Big. Whether the home is considered big or small is subjective and depends on local norms and personal expectations. However, 1,111 square feet is generally considered moderately sized or small for a single-family home in many areas.