Final answer:
The back ratio is found by dividing total monthly expenses by total monthly income. In this case, it is $2,661 divided by $5,910, which equals 0.4502, or 45.02%. Therefore, the back ratio is 45.0% (choice d).
Step-by-step explanation:
To calculate the back ratio, we need to add up all of the monthly expenses and divide by the total monthly income. The student provided the following expenses:
- Mortgage (including all housing costs) = $1,982
- Student loan = $258
- Minimum credit card payments = $184
- Home equity loan = $237
And the following sources of income:
- Salary = $4,115
- Bonus = $700
- Side business = $1,000
- Dividends/interest = $95
First, we sum up the monthly expenses:
$1,982 + $258 + $184 + $237 = $2,661
Then, we sum up the monthly incomes:
$4,115 + $700 + $1,000 + $95 = $5,910
Now, we divide the total expenses by the total income to find the back ratio:
$2,661 / $5,910 = 0.4502, or 45.02%
Rounded to the nearest tenth, the back ratio is 45.0%, which corresponds to answer choice (d).