Question

Given the information below, what are the debt-to-income ratio and front ratio, respectively Monthly expenses: Mongage (including all housing costs) = $2,009 Student loan= $289 Minimum credit card payments = 5232 Home equity loan = $212 Monthly income: Salary = $4,619 Bonus = 5750 Side business = $1,050 Dividends interest = $20041 4% and 352%41.4% and 30.4%39.6% and 30.4%39.6% and 352%None of these choices are correct

Answer 1

The total income is $6619.

The total expenses per month are $2742.

Hence the debt to income ratio is:

`(2742)/(6619)\cdot100=41.4`

The front ratio is the housing payment divided by monthly income, then we have:

`(2009)/(6619)\cdot100=30.4`

Therefore the debt to income ratio is 41.4% and the front ratio is 30.4%.