Question

Manuel labore earns $19. 50/hr. And works an average of 38 hours a week. He is considering renting a house for $1,700/ month. His real estate friend recommends he spend no more than 28% of his monthly income on housing.

Answer 1

Given:

• Wage = $19.50 per hour
• Weekly hours worked = 38

⇒ Weekly income = 38 × $19.50 = $741

⇒ Monthly income = ($741 × 52.14) ÷ 12 = $3219.65

28% of monthly income

= 0.28 × $3219.65 = $901.50

As $1700 > $901.50 Manuel should not rent the house for $1700 per month since it is more than 28% of his income.

The cost of rent at $1700 per month is actually 52.8% of his monthly income:

(1700 / 3219.65) x 100 = 52.8%