Question

Using the banker's rule, the minimum annual income needed to borrow $75,000 for the purchase of a home is:

a. $17,442
b. $30,000
c. $75,000
d. $187,500​

Answer 1

b. $30,000

Explanation:

According to the banker rule, the minimum annual income needed to borrowed should be maximum of 2.5% of the annual income

Given that

The amount borrowed for purchased of the home is $75,000

So based on the above information, the minimum annual income is

`= Borrowed\ amount * given\ percentage`

`= \$75,000 * 2.5\%`

= $30,000

By multiplying the borrowed amount with the given percentage we can get the required minimum annual income and the same is to be shown above