To be eligible for a car loan, Melissa's monthly rent and utilities cannot exceed 30% of her take-home pay. Use the information below to determine whether Melissa is eligible for the loan.

Rent & Utilities = 1075
Gross paycheck = 3950
Net paycheck (after taxes) = 3260

Question

To be eligible for a car loan, Melissa's monthly rent and utilities cannot exceed 30% of her take-home pay. Use the information below to determine whether Melissa is eligible for the loan.

Rent & Utilities = 1075
Gross paycheck = 3950
Net paycheck (after taxes) = 3260

tkhunny · Answer

3260 is "take-home"

anonymous · Answer

Then what do you do?

anonymous · Answer

find the percent of her rent and utilities to take home pay

rent-utilities / take home pay

anonymous · Answer

Is the take home pay 3950 or 3260?

anonymous · Answer

net pay after taxes is take home pay so it is 3260

anonymous · Answer

0.32?

anonymous · Answer

correct - so it exceeds her allowance...

anonymous · Answer

Thank you.

anonymous · Answer

you are welcome...mainly understanding terminology.  Happy studies