Jill and Ray have combined annual gross earnings of $36,700. What is the
maximum amount they should consider spending for the purchase of a
house?
a. $36,700
b. $91,750
c. $73,400
d. $63,570
1 answer
The general rule of thumb is that the maximum amount spent on housing should not exceed 30% of one's gross income. Therefore, 30% of $36,700 is $11,010. This is the maximum amount they should consider spending on housing, so the answer is not listed. However, if we assume that they are willing to push it a bit further, the closest option would be c. $73,400, which is approximately 2 times their combined gross income.
1 answer