The formula to calculate the income-based rent is:
\[ R = I \times P \]
Where:
To get the monthly rent, divide the annual rent by 12:
\[ \text{Monthly Rent} = \frac{R}{12} \]
Income-based rent, also known as income-adjusted or income-restricted rent, is a type of rental agreement where the amount a tenant pays is determined by their income. This is often used in affordable housing programs, where the goal is to provide housing to low-income individuals or families. The rent is typically set at a fixed percentage of the tenant’s income, often around 30%, to ensure that housing costs are affordable and do not place an undue financial burden on the tenant.
Example:
Step 1: Calculate the annual rent:
\[ R = 40000 \times 0.3 = 12000 \text{ dollars} \]
Step 2: Calculate the monthly rent:
\[ \text{Monthly Rent} = \frac{12000}{12} = 1000 \text{ dollars} \]
