Question

A common rule is that housing plus other debt should not be more than 36% of your monthly income. Your monthly income is $4300 and you have student loan payments of $312 per month. How much can you spend on housing?

Answer 1

The amount that can be spent on housing is $1,236 as shown below

Step-by-step explanation:

Going strictly by the rule that cost of housing and other debt combined together should not be more than 36% of monthly income,the amount that can be spent on housing is 36% of monthly income less student loan payment of $312.

36% of monthly income(36%*$4300) $1,548

deduct student loan payment ($312)

Housing cost $1,236

All in all, the sum of $1,236 can be spent on housing,this means that one has to search for a decent accommodation whose monthly cost is the region of the amount budgeted.

Answer 2

Amount to be spent on housing = $1,236

Step-by-step explanation:

The amount that can be spent on housing

let y represent the amount to be spent on housing

36% =( 312 + y)/4300

cross multiplying

1548 = 312 + y

1548- 312 = y

1,236 = y

Amount to be spent on housing = $1,236