Question

Jacob recently graduated from college and is starting a new job where he will have to commute to work by car. He shares an apartment with a roommate and his share of rent and utilities comes to $700 per month. His other necessary monthly expenses include $350 per month for food, $350 per month in student loan repayments and $200 per month in personal expenses. His take-home pay from work is $2,000 per month. If auto insurance and repairs for his new vehicle are expected to be $200 per month, what is the greatest amount he can commit for a monthly vehicle payment with no safety margin?

Answer 1

Answer:

The answer is: $200

Explanation:

Jacob's total expenses (current and expected) are:

• rent and utilities $700
• food $350
• student loan $350
• personal expenses $200
• expected auto insurance and repairs $200

Total expenses = $1,800

If Jacob's take away salary is $2,000, he will only have $200 (= $2,000 - $1,800) for a car loan or lease monthly payment.