Question

Timothy Carter has net monthly income of $3,800. He has a monthly auto loan payment of $350, a student loan payment of $150, a mortgage payment of $1,200, and a credit card minimum payment of $45. What is his debt-payments-to-income ratio

Answer 1

45.9%

Step-by-step explanation:

The computation of the debt payment to income ratio is as follows:

Income = $3,800

And,

Debt payment is

= auto loan payment + student loan payment +mortgage payment + credit card payment

= $350 + $150 + $1200 + $45

= $1745

So,

Debt payment to income ratio is

= Debt payment ÷ income

= $1,745 ÷ $3,800

= 0.459

= 45.9%