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

You will save $ 2,128 in an academic year

Explanation:

1. Let's review the information given to us to answer the question correctly:

Monthly rent of the campus apartment = $ 1,025 + $ 60 for electricity

You'll split the rent = 60/40 and you'll pay 40%

Monthly amount for housing = $ 700

Academic year = 8 months

2. What can you save above your out of pocket housing cost with your scholarship and your roommate's contribution?

Let's calculate how much you save per month and then let's multiply that amount by 8, to find the total amount for the academic year, as follows:

Fellow student will pay 60% = 0.6 * 1,085 = 651

Now, you will save per month:

Monthly amount for housing + Fellow student will pay 60% - Monthly rent of the campus apartment

Replacing with the real values, we have:

Savings per month = 700 + 651 - 1,085

Savings per month = 266

Savings in an academic year = 266 * 8

Savings in an academic year = 2,128