Question

Natalie makes $2,000 per month. She spends $100 on credit card payments and $250 on an auto loan. What is her debt-to-income ratio?

17.5 percent
22 percent
2.7 percent
32.5 percent

Answer 1

17.5

Explanation:

Answer 2

Monthly income = 2000 dollars
Debt to pay = 250 + 100 = 350 dollars
Let's find the ratio of debt to income.
=> 350 / 2000 = 0.175
=> 0.175 * 100 = 17.5 percent.
Thus 17.5% of his salary goes to his debts for credit card and auto loan.