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Dominik has a monthly net income of $1,860. His fixed monthly expenses consist of a rent payment of $450. He is paying off a student loan of $280 per month. Dominik would like to buy a new flat screen television set using a retail credit card. What is the largest monthly payment Dominik can afford for the television set so that his credit card payments and tudent s loan keep him within a recommended limit of 20%?

Answer :

The largest payment he can afford is $92.

We set up the equation
(280+x)/1860 ≤ 0.2

Multiply both sides by 1860:
((280+x)/1860)*1860 ≤ 0.2(1860)
280+x ≤ 372

Subtract 280 from both sides:
280+x-280 ≤ 372-280
x ≤ 92

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