Question

You (or your parents) plan to pay $1,275.00/month for a mortgage. How much is the minimum realized income per month to the nearest penny? Round any decimals to the nearest penny. $ /month

Answer 1

To determine the minimum realized income per month needed to afford a mortgage payment of $1,275.00, we generally consider that a common guideline is that your mortgage payment should not exceed about 28% to 30% of your gross monthly income.

Using the more conservative figure of 28%, we can set up the equation as follows:

\[
\text{Mortgage Payment} = 0.28 \times \text{Gross Monthly Income}
\]

We can rearrange this to find the Gross Monthly Income:

\[
\text{Gross Monthly Income} = \frac{\text{Mortgage Payment}}{0.28}
\]

Substituting in the mortgage payment:

\[
\text{Gross Monthly Income} = \frac{1,275.00}{0.28}
\]

Now, let's calculate it:

\[
\text{Gross Monthly Income} = \frac{1,275.00}{0.28} \approx 4,553.57
\]

Rounding to the nearest penny, the minimum realized income per month would be:

\[
\text{Gross Monthly Income} \approx \$4,553.57
\]

Thus, the answer is approximately **$4,553.57/month**.