Using the 20/10 rule, calculate the maximum amount to borrow if your net yearly income is $75,000

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Carly

Business

2 June, 13:08

Using the 20/10 rule, calculate the maximum amount to borrow if your net yearly income is $75,000

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Mckenzie Sanders · Answer 1

Using the 20/10 rule: you should never borrow more than 20% of your annual net income and monthly payments shouldn't be more than 10% of your monthly net income.

In this situation, we know the yearly net income is $75,000.

First we want to multiply 20% by $75,000 = $15,000

$15,000 is 20% of your yearly net income.

This would be the most you'd want to borrow given the information provided.