et Summ... Pages-Enterprise Service. Documents for Director S.Active Recnuitment
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et Summ... Pages-Enterprise Service. Documents for Director S.Active Recnuitments Ho..AIS.PosMaste0750 All... PERSONAL FINANCIAL PLANNING Discussions Dropbox Quizzes Checklist Grades More Tools, Resources Tenisha Foy: Attempt Question 6 (1 point) Kim Lee is trying to decide whether she can afford a loan she needs in order to go to chiropractic school. Right now Kim is living at home and work shoe store, earning a gross income of $1310 per month. Her employer deducts a total of $200 for taxes from her monthly pay. Kim also pays $70 on credit card debt each month. The loan she needs for chiropractic school will cost an additional $110 per month. Calculate her debt payments-to-income ratio with college loan. Don't forget to convert your answer to a percentage. Make sure to include zeros and the period in your answer. Round your answer to 2 decimal places. i.e. 20.12, 31.89, 10.02, 8.09, etc. t include the "%" sign in vora werExplanation / Answer
Solution:
The debt payments to income ratio is calculated as follows :
= [Total of recurring payments per month/ Gross income per month (before taxes)]
As per the information given in the question we have
Credit card payment per month = $ 70
College loan instalment per month = $ 110
Thus,
(a) Recurring payments per month = Credit card payment per month + College loan instalment per month
= $ 70 + $ 110 = $ 180
(b) Gross income per month (before taxes) = $ 1310
Debt payments to income ratio = a/b = $ 180/ $ 1310 = 0.1374 (rounded off to four decimals)
= 13.74 % ( in percentage form)
Thus, debt payments to income ratio with college loan of Kim lee = 13.74
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