Bryson makes an annual salary of $42,000 a year. Apply the rule of housing to determine his monthly housing budget.

A. $420

B. $600

C. $875

D. $1,025

C. $875

Step-by-step explanation:

The rule of housing is the rule of thumb of not using more than 25% of your gross income. This means that the households supposed limited expenses on housing would be a maximum of 25% only.

So to find the monthly housing budget of Bryson, we simply take his annual salary and multiply it by 25% or 0.25 and then divide the product by 12.

Monthly Housing Budget = ($42,000 * 0.25) / 12

Monthly Housing Budget = 10500/12

Monthly Housing Budget = $875