Rhett has been late on two of his monthly rent payments, but his landlord does not charge late fees and so he will be able to pay their total cost with 3/5 of his next month's salary after taxes. If he is currently paid $5000 per month and has to pay 10% tax, calculate his rent expense per month?
Thoughts? Step-by-step reasoning:
If Rhett is currently paid $5000 per month, he pays 10 / 100 * $5000 = $500 in taxes. Rhett has been late on two of his monthly rent payments and plans to pay them with 3 / 5 * $4500 = $2700 from his salary after taxes. If he is to pay $2700 for two late monthly rent payments, his monthly rent expense is $2700 / 2 = $1350.
Thus, the answer is 1350.