Question

Ron makes $2,980 a month. What is the maximum monthly rent he can afford?

$655.60

$745

$834.40

$774.80

Answer 1

the max he can afford is $834.40

Answer 2

Answer with explanation:

Amount earned by Ron Monthly = $ 2,980

To find maximum monthly rent that Ron ,Could afford, we will use $\frac{28}{36}$ rule, which states that ,28% of monthly gross income should be used for debt purposes and 36% of monthly gross income should be used for debt Purposes.

Maximum Monthly rent that Ron could afford

=28% of $2,980

$=\frac{28}[100}\times 2980\\\\=\frac{28 \times 298}{10}\\\\=\frac{8344}{10}\\\\=834.40$

Option C: $ 834.40