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In Millington, a city of 50,000 people, Mercedes Pedrosa, a realtor

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In Millington, a city of 50,000 people, Mercedes Pedrosa, a realtor  [#permalink]

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New post 31 Aug 2018, 04:15
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  35% (medium)

Question Stats:

75% (01:46) correct 25% (01:52) wrong based on 52 sessions

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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.

(E) Families in Millington could only afford to pay up to 22 percent of their annual income for housing.

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Re: In Millington, a city of 50,000 people, Mercedes Pedrosa, a realtor  [#permalink]

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New post 31 Aug 2018, 07:17
Bunuel wrote:
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?



Our goal: Make change so that the new calculations make it possible for people with below median family income to afford M's median prices house.
Pre-thinking Options: Increase median income or reduce price of median priced house or reduce interest rate or increase the percent of pay that a family could afford to pay for housing

(A) Millington’s total population was 45,000 people.We don't what is value of new median

(B) Millington’s median annual family income was $27,000.Opposite

(C) Millington’s median-priced house cost $80,000.Opposite

(D) The rate at which people in Millington had to pay mortgage interest was only 10 percent.Correct. Lowers the interest rate

(E) Families in Millington could only afford to pay up to 22 percent of their annual income for housing.Opposite
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Re: In Millington, a city of 50,000 people, Mercedes Pedrosa, a realtor  [#permalink]

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New post 31 Aug 2018, 10:41
I got to D by POE.

(A) Millington’s total population was 45,000 people.
irrelevant

(B) Millington’s median annual family income was $27,000.
does not help to know how the people below can buy houses? opposite if anything

(C) Millington’s median-priced house cost $80,000.
house more expensive! opposite

(D) The rate at which people in Millington had to pay mortgage interest was only 10 percent.
rate is lower; less money would have to be paid. HOLD

(E) Families in Millington could only afford to pay up to 22 percent of their annual income for housing.
if they can only pay 22% instead of 25%, fewer families will be able to buy houses. opposite.
Re: In Millington, a city of 50,000 people, Mercedes Pedrosa, a realtor &nbs [#permalink] 31 Aug 2018, 10:41
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