Question

Carl's house payment is $3,729 per month and his car payment is $1,221 per month. If Carl's take home pay is $6,600 per month, what percentage does Carl spend on his car payment? (Enter your answer as a percent rounded to 2 decimal places.)

Loan payments-to-income ratio __ %

Answer 1

Carl spends 18.50% of his take home pay on his car payment.Carl spends approximately 18.50% of his take-home pay on his $1,221 car payment.

Step-by-step explanation:

To find the percentage of Carl's take home pay that he spends on his car payment, we need to divide his car payment by his take home pay and then multiply by 100.

Car Payment Percentage = (Car Payment / Take Home Pay) x 100

Substituting the given values, Car Payment Percentage = ($1,221 / $6,600) x 100 = 18.50% (rounded to 2 decimal places).

Calculating the percentage of Carl's take-home pay spent on his car payment involves dividing the car payment by the take-home pay and then multiplying by 100 to express it as a percentage. In this case, Carl's car payment of $1,221 is divided by his take-home pay of $6,600. The resulting fraction, when multiplied by 100, gives the car payment percentage.

Therefore, Carl spends approximately 18.50% of his take-home pay on his car payment. This calculation helps individuals assess their financial allocations, providing insights into budgeting and potential adjustments in spending patterns. Understanding the proportion of income dedicated to specific expenses aids in making informed financial decisions and maintaining a balanced budget.