afford to earn

diego707

Senior Member
portuguese
I'm having difficulties understanding the following problem:

You have $50,000 to invest, and two funds that you'd like to invest in.(Fund Y) yields 14% interest.(Fund X) yields 6% interest.

Because of college financial-aid implications, you don't think you can afford to earn more than $4,500 in interest income this year.

How much should you put in each fund?


I know i can use afford in phrases like:
I'm going to get an apartment, I'm sure i can afford it.
I can't afford driving 75 miles everyday.

But I'm not familiar with afford to earn something beneficial like interest income..

For me it's like saying: I can't afford to earn a $50 from my bank.

Well, afford looks strange to me in this phrase, can you help me out here?
 
  • veggie21

    Senior Member
    English England
    Can you afford not to do it? means 'Are you prepared to face the consequences of not doing it?' 'Are you prepared to take the risk of not doing it?' 'What will happen if you don't do it?'
    In other words, 'would it be in your interest to do it or not?
     

    diego707

    Senior Member
    portuguese
    It is the same as "I can't afford driving 75 miles everyday". I cannot allow myself to earn more than...
    The issue here is that we're talking about money "interest income" that the bank is paying us.

    What's the problem earning interest income then? I assume Every money we receive is very appreciated...
     

    veggie21

    Senior Member
    English England
    example:

    1) I can't afford to earn more than XXXXX per year or I'll have to pay too much tax.
    In other words, 'It's not in my best interest to earn XXXXX per year'.
    2) I can't afford not to take the apprenticeship.
    In other words, taking the apprenticeship will give me the experience I may need when applying for jobs in the future. (it's in my best interest!)
     

    Glasguensis

    Signal Modulation
    English - Scotland
    You clearly understand the meaning, so this is not a language question. If he earns more than $4500 it will reduce (or remove) the college financial aid he receives, so overall he will have less money.
     

    diego707

    Senior Member
    portuguese
    I get your point, maybe i am not familiar with interest income..

    since the government taxes just a percentage of your interest income, why is it a big deal receiving a big amount of interest income "money" since you'll have the money to pay for those taxes?. Isn't interest income also money in the first place?
     

    Myridon

    Senior Member
    English - US
    I get your point, maybe i am not familiar with interest income..

    since the government taxes just a percentage of your interest income, why is it a big deal receiving a big amount of interest income "money" since you'll have the money to pay for those taxes?. Isn't interest income also money in the first place?
    He receives money to go to university (college financial aid). This money is given to him because he cannot afford the university fees. The amount of the aid is dependent on income. Raising his income from $4499.99 to $5000 may cause him to lose his financial aid or a significant portion of it. Earning that extra $0.01 could cost him thousands of dollars.
     

    diego707

    Senior Member
    portuguese
    Wow, I didn't know financial aid works that way, that's so unfair!

    Myridon's answer explains better, Thank you everybody though!
     
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