Enter the combined gross income of tenants and the maximum RTI (rent-to-income) ratio allowed by law into the calculator to determine the Maximum Rent.
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Maximum Rent Formula
The following formula is used to calculate the Maximum Rent.
Rmax = GI * RTI
- Where Rmax is the Maximum Rent ($)
- GI is the combined gross income of tenants
- RTI is the maximum RTI (rent-to-income) ratio allowed by law
To calculate the maximum rent, multiply the combined gross income of the tenants by the maximum rent-to-income ratio allowed by law.
How to Calculate Maximum Rent?
The following example problems outline how to calculate Maximum Rent.
Example Problem #1:
- First, determine the combined gross income of tenants. In this example, the combined gross income of tenants is given as 10000.
- Next, determine the maximum RTI (rent-to-income) ratio allowed by law. For this problem, the maximum RTI (rent-to-income) ratio allowed by law is given as .5.
- Finally, calculate the Maximum Rent using the equation above:
Rmax = GI * RTI
The values given above are inserted into the equation below:
Rmax = 10000 * .5 = 5000.00 ($)
Example Problem #2:
The variables needed for this problem are provided below:
combined gross income of tenants = 6000
maximum RTI (rent-to-income) ratio allowed by law = .75
Entering these values and solving gives:
Rmax = 6000 * .75 = 4500 ($)
