Question

etty makes $60,480 annually and pays about 20% of their gross monthly income in federal and state taxes. they want to find an apartment to rent for no more than 30% of their monthly income after taxes. what is the monthly rent that etty can afford, and how much will etty have remaining each month after paying rent and taxes? etty can afford dropdown for rent and will have remaining each month after paying rent and taxes. options: $2,217; $2,822.40; $3,830.40; $4,032

Explanation:

Step 1: Calculate monthly gross income

Annual income is $\$60,480$. To find the monthly gross income, we divide the annual income by 12.
$$\text{Monthly gross income}=\frac{60480}{12} = 5040$$

Step 2: Calculate monthly income after taxes

Etty pays 20% of their gross monthly income in taxes. So the income after taxes is 80% (100% - 20%) of the gross monthly income.
$$\text{Monthly after - tax income}=5040\times(1 - 0.2)=5040\times0.8 = 4032$$

Step 3: Calculate rent amount

Rent is no more than 30% of the monthly after - tax income.
$$\text{Rent}=4032\times0.3 = 1209.6$$

Step 4: Calculate remaining amount after rent and taxes

Subtract the rent from the monthly after - tax income.
$$\text{Remaining amount}=4032 - 1209.6 = 2822.4$$

So the remaining amount (which is one of the options) is $\$2,822.40$, and the rent amount is $\$1,209.6$. Since the options provided are for the remaining amount, the correct option for the remaining amount is $\$2,822.40$.

Answer:

For rent: $\$1,209.6$ (Note: If we consider the process to get the remaining amount: First, find the monthly gross income: $\frac{60480}{12} = 5040$. Then, find the income after taxes: $5040\times(1 - 0.2)=4032$. Then, the rent is $4032\times0.3 = 1209.6$. The remaining amount is $4032 - 1209.6=2822.4$, which matches the option $\$2,822.40$ for the remaining. But since the rent amount isn't in the dropdown as calculated? Wait, maybe I misread. Wait, the dropdown is for the remaining? No, the first box is for rent, the second is for remaining. Wait, the options given are for the remaining? Wait, the user's image: the first box is "Etty can afford [dropdown] for rent and will have [checkmark] remaining... The options are $2,217, $2,822.40, $3,830.40, $4,032. Wait, let's recalculate:

1. Annual income: $\$60,480$. Monthly gross income: $\frac{60480}{12} = 5040$ (monthly gross).

1. Taxes: 20% of gross monthly, so income after taxes: $5040\times(1 - 0.2) = 5040\times0.8 = 4032$ (monthly after taxes).

1. Rent: no more than 30% of monthly after - tax income. So rent: $4032\times0.3 = 1209.6$. Then remaining after rent and taxes: $4032 - 1209.6 = 2822.4$. So the remaining amount is $\$2,822.40$, which is one of the options. So the rent is $\$1,209.6$ (not in options? Wait, maybe the dropdown is for the remaining? No, the first box is "afford for rent", the second is "remaining". Wait, maybe the options are for the remaining. So the remaining amount is $\$2,822.40$, and the rent is $4032\times0.3 = 1209.6$. But the options given are for the remaining? Let's check the options:

• Option 1: $2,217$: No.

• Option 2: $2,822.40$: This matches our calculation of $4032 - 1209.6 = 2822.4$.

• Option 3: $3,830.40$: No.

• Option 4: $4,032$: This is the after - tax income, not remaining.

So the remaining amount is $\$2,822.40$, and the rent is $1209.6$. But the first box is for rent. Wait, maybe I made a mistake. Wait, maybe the rent is 30% of gross? No, the problem says "30% of their monthly income after taxes".

Wait, maybe the dropdown options are for the rent? No, the first box is "afford for rent", the second is "remaining". Let's re - examine the problem statement: "They want to find an apartment to rent for no more than 30% of their monthly income after taxes."

Monthly after - tax income: $4032$. 30% of that is rent: $4032\times0.3 = 1209.6$. Then remaining: $4032 - 1209.6 = 2822.4$. So the remaining amount is $\$2,822.40$, which is the second option. So the rent is $\$1,209.6$ (not in options? But the options are for the remaining? So the answer for the remaining is $\$2,822.40$, and the rent is $\$1,209.6$. But the first box is for rent. Wait, maybe the problem has a typo, or I misread the dropdown. Alternatively, maybe the rent is 30% of gross? Let's check: 30% of 5040 is $1512$, remaining would be $4032 - 1512 = 2520$, not in options. No. So the correct remaining amount is $\$2,822.40$, so the answer for the remaining (the checked one) is $\$2,822.40$, and the rent is $\$1,209.6$ (but it's not in the options? Wait, maybe the first dropdown is for the remaining? No, the label is "afford for rent". Wait, maybe the user's image has the first box as for rent, but the options are for the remaining. So the answer for the remaining is $\$2,822.40$, so the second option.