Question

Kelly makes $56200 per year and is looking to find a new apartment rental in her city. She searched online and found an apartment for $1600 per month. The recommendation is to budget between 25% and 30% of your monthly income for rent. Can Kelly afford this apartment? Explain

Answer 1

I’m from the U.K. so prefer using the pound sign, just change back to dollars.

Salary: £56,200 / 12 = £4683.33 a month

(£1600/£4683.33) x100 = 34.16 %

She can afford this apartment based on the amount of money she makes a month.

However, the recommendation states to budget for 25-30% and the rent is 34.14% of her monthly salary.

Therefore the answer is, no.