Question

Robert works as a curator at the local historical museum and earns $56,130 per year. He made a list of his current debt payments per month, as follows. What is

Robert's debt-to-income ratio? Round to the nearest thousandth (0.001) and then multiply by 100 to get the percentage format.
mortgage $989.74
car loan = $365.75
student loans - $178.95
credit cards $276.19
O 38.7%
O 35.4%
O 39.5%

Answer 1

38.7%

Explanation:

The first step is to find the total monthly debt payments. You can find this by adding up the mortgage, car loan, student loans, and credit cards: 989.74 + 365.75 + 178.95 + 276.19. By solving this, you get $1810.63 as the total monthly debt payments. After that, you find the monthly income by dividing the Annual income by number of months in a year: $56130 ÷ 12. By solving this, you get $4677.50 as the monthly income. To find the debt-to-income ratio, you have to divide the total monthly debt by monthly income, and multiply the result by 100: ($1810.63 ÷ $4677.50) × 100 = 0.387 × 100. By solving this, you get 38.7% as your debt-to-income ratio.