Question

Nina's monthly budget is $2,250. Every month she makes the following payments: $175 for insurance, $129 for utilities, $283 for taxes. Which is the highest house payment she can afford?
A.) House A - monthly payment: $1,580.89.
B.) House B - monthly payment: $1,790.25.
C.) House C - monthly payment: $1,989.23.

Answer 1

The total costs that Nina would have to pay is the sum of the cost of insurance, utilities, and taxes.
                               C = $175 + $129 + $283 = $587
The highest house payment she could afford is then the difference between her budget and the costs,
                                  P = $2,250 - $587 = $1663
Thus, the answer would be letter B. House B because all the rest of the monthly payment are way over her budget. 

Answer 2

A) House A

Her costs monthly add up to $587 so take that out of her monthly budget. $1,663 is left so she can only afford house A.