Question

A campus apartment has two bedrooms and two attached bathrooms and rents for $1,025 per month plus an average of $60 per month for electricity. You are a student and would have the option of splitting the rent with a fellow student 60/40. You pay 40% as your name is on the lease. Your scholarship gives you $700 per month for housing. What can you save above your out of pocket housing cost with your scholarship and your roommate's contribution in an Academic Year (8 months).

Answer 1

$2,128

Explanation:

Expenses is allocated based on the decided ratios. Expenses and Inflows

Expenses will be calculated for 8 Months time period.

Rent = 1,025 x 8 months = $8,200

Electricity Expense = $60 x 8 = $480

Total Expense = $8,200 + $480 = $8,680

Total Scholarship = $700 x 8 = $5,600

Out of Pocket Cost = $8,680 x 40% = $3,472

Saving is the difference between The scholarship received and the Expenses made from pocket.

Saving = $5,600 - $3,472 = $2,128

Answer 2

I can save $2,128 in my academic year and my roommate can save $392 in their academic year.

Step-by-step explanation:

Total housing amount= rent + electricity= $1,025 + $60= $1,085 per month

My rent is 40% of $1,085 which equals $434 a month while my roommate’s rent would be 60% of $1,085 which equals $651 a month.

The scholarship gives me $700 a month for housing out of which I spend $434 and my roommate spends $651.

I save; $700 - $434 = $266 a month

My roommate saves; $700 - $651 = $49 a month.

An academic year lasts for 8 months so my savings= $266 x 8 = $2,128

My roommate’s savings= $49 x 8 = $392