Answer:
The correct answer is A. $388
Step-by-step explanation:
The 28/36 Rule states that : A household should spend a maximum of 28% of its gross monthly income on total housing expenses and not more than 36% on total debt service.
Maximum expense on housing expense = 28% of 4850
= $1358
Maximum expense on total debt service = 36% of 4850
= $1746
Therefore, the maximum allowable recurring debt with a monthly income of $4,850 = 1746 - 1358 = $388
Hence, The option A is correct.
