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CR Math

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Director
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CR Math [#permalink] New post 24 Oct 2005, 19:07
00:00
A
B
C
D
E

Difficulty:

  5% (low)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions
Please explain with answer


In Millington, a city of 50,000 people, Mercedes Pedrosa, a realtor, calculated that a family with Millington’s median family income, $28,000 a year, could afford to buy Millington’s median-priced $77,000 house. This calculation was based on an 11.2 percent mortgage interest rate and on the realtor’s assumption that a family could only afford to pay up to 25 percent of its income for housing.
Which of the following corrections of a figure appearing in the passage above, if it were the only correction that needed to be made, would yield a new calculation showing that even incomes below the median family income would enable families in Millington to afford Millington’s median-priced house?
(A) Millington’s total population was 45,000 people.
(B) Millington’s median annual family income was $27,000.
(C) Millington’s median-priced house cost $80,000.
(D) The rate at which people in Millington had to pay mortgage interest was only 10 percent.
Manager
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Re: CR Math [#permalink] New post 24 Oct 2005, 19:25
mahesh004 wrote:
Please explain with answer


In Millington, a city of 50,000 people, Mercedes Pedrosa, a realtor, calculated that a family with Millington’s median family income, $28,000 a year, could afford to buy Millington’s median-priced $77,000 house. This calculation was based on an 11.2 percent mortgage interest rate and on the realtor’s assumption that a family could only afford to pay up to 25 percent of its income for housing.
Which of the following corrections of a figure appearing in the passage above, if it were the only correction that needed to be made, would yield a new calculation showing that even incomes below the median family income would enable families in Millington to afford Millington’s median-priced house?
(A) Millington’s total population was 45,000 people.
(B) Millington’s median annual family income was $27,000.
(C) Millington’s median-priced house cost $80,000.
(D) The rate at which people in Millington had to pay mortgage interest was only 10 percent.


(A) Millington’s total population was 45,000 people.
This may or may not shift the median income favorably.

(B) Millington’s median annual family income was $27,000.
If median shifts down then less people will buy house keeping everything same.

(C) Millington’s median-priced house cost $80,000.
If house price increases less people will buy.

(D) The rate at which people in Millington had to pay mortgage interest was only 10 percent.
------ If rate decreases more people can buy. So I would go with D.
Director
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 [#permalink] New post 24 Oct 2005, 19:31
Sure (D).

Low interest rates mean more buying power.
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Auge um Auge, Zahn um Zahn :twisted: !

Director
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 [#permalink] New post 25 Oct 2005, 04:12
D indeed!
Somehow it seems too easy to be true......
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Cheers, Rahul.

  [#permalink] 25 Oct 2005, 04:12
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