Question

Nicholas makes $2,000 per month.He spends $300 on credit card payments and $350 on an auto loan.what is his debt to income ratio

Answer 1

0.325 or 32.5%

Explanation:

Income per month = $2,000

Total monthly debt consist of the credit cards payment and auto loan. Therefore, the total debts

= $300 + $350

= $650

The debt to income ratio is a fraction of the debt to the total income

= $650/$2000

= 0.325 or 32.5%

Answer 2

32.5%

Explanation:

His debt payments total $300 +350 = $650.

As a fraction of his income, that is ...

$650/$2000 = 325/1000 = 32.5/100 = 32.5%

Nicholas's debt to income ratio is 32.5%.