Question

Rex makes 12.50 per hour. He works 35 hours a week. He pays 24% Of his gross earnings in federal and state taxes and saves 10% of his monthly gross income. He is considering renting an apartment that will cost 1600 per month.

A. Is this monthly rental fee within the recommended 25%-30% housing expense range?

B. Based upon his expenses, can he make the monthly payments?

Answer 1

• See below

Explanation:

Monthly gross income:

• 12.50*35*4 = 1750

Taxes:

• 1750*24/100 = 420

Saving amount:

• 1750*10/100 = 175

Net income:

• 1750 - 420 - 175 = 1155

A. The rental amount is more than Rex's net income, so the answer is No

B. He is left with negative balance, so this is also No