Question

4. Jane wants to keep her debt-to-income ratio at the recommended 15% or lower. The sum of Jane's assets is $12,000 and the sum of her liabilities is $2,300, so she easily falls within the recommended

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amount.
True
False

Answer 1

Explanation:

True.

To calculate Jane's debt-to-income ratio, we need to divide her total liabilities by her total income. However, the prompt only gives us the sum of Jane's assets and liabilities, not her income.

Assuming that Jane's assets are not considered as part of her income, we can conclude that she falls within the recommended amount, since her total liabilities ($2,300) divided by her total income (which we don't know but is presumably greater than her liabilities) would be less than 15%.