Question

Owen makes $3,000 per month. He spends $300 on credit card payments and $350 on an auto loan. What is his debt-to-income ratio?

1)50 percent
2)32 percent
3)4.6 percent
4)22 percent

Answer 1

He spends $750, and makes $3000

3000/650=0.22

The answer is 22%

Answer 2

Answer: Option 'D' is correct.

Explanation:

Since we have given that

Income per month = $3000

Credit card payment = $300

Loan amount on auto = $350

Total amount of debt is given by

`\$300+\$350\\\\=\$650`

So, Ratio of debt to income would be

`(650)/(3000)* 100\\\\=(650)/(30)\\\\=21.6\\\\=22\%`

Hence, Option 'D' is correct.