Question

Tom is 45 and pays $2042 on his mortgage each month while his total take home pay is $5950 per month. The national average, for those aged 35-64, on a housing costs is 35% of income. Compute the percent of Tom's income that he spends on housing. Is this more or less than the national average?

Answer 1

Take the amount that he pays for his mortgage, so $2042, and divide that by his total pay, $5950. You’ll get .34016907. Then to make a decimal into a percentage, you multiply it by 100. This gives you 34%, meaning he spends less than the national average on housing.