Question

The question is up top and the below answer is what I answered but was wrong Tip: divide bad debt(car payment&credit cards) by income to see what the percentage is. If it is over 20%, then it is considered credit overload

Answer 1

We need to find which percentage of her total income that she spends, per month. Remember that "savings" is not a spent.

Her total monthly spending, in dollars, is:

`975+250+275+76+114+350=2040`

And her total monthly income, in dollars, is 2255.

Thus, the percentage of the income that she spends is given by:

`(2040)/(2255)\cong0.9=90\%`

Therefore, since her spending corresponds to approximately 90% of her income, which is more than 20%, then she is in credit overload.