Answer:
Amount that Alice earns annually= $ 20, 504
We will use [tex]\frac{28}{36}[/tex] rule here, which states that , 28 % of your monthly income should be used for housing finances, including rent also, and 36 % of your monthly income should be used for debt purposes.
Amount earned by Alice monthly
[tex]=\frac{20,504}{12}\\\\=1708.66[/tex]
28% of 1708.66
[tex]=\frac{28}{100}\times 1708.66\\\\=\frac{47842.66}{100}\\\\=478.43[/tex]
Maximum monthly rent that Alice can afford = $478(approx)
