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In Millington, a city of 50,000 people, ......

Expert replies
by airan » Sat Jun 14, 2008 8:48 am
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.
Thanks
Airan
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Source: — Critical Reasoning |

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chidcguy's response
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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.

Everything else constant, some one with a income of 20K cannot afford the home. Pop has no relevance as it includes kids who do not earn.

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

Everything else constant, some one with a income of < 27K (say 23k)possibly cannot afford the home.

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

Everything else constant, some one with a income of < 28k possibly cannot afford the home, esp when the median home price has gone up

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

Everything else constant, some one with a income of < 28k possibly can afford the home as their income might be some thing like 27.5K and the interest rate has dropped by almost 1 percentage point

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

Everything else constant, some one with a income of < 28k possibly cannot afford the home, if the amount they can allocate for mortgage payment has gone down.

My pick D
Thanks
Airan
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by peter.p.81 » Wed May 11, 2016 12:15 am
Looking at it now, D makes sense
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