Question

Timothy Carter has a net monthly income of $5,100. He has a monthly auto loan payment of $675, a student loan payment of $345, a mortgage payment of $1,660, and a credit card minimum payment of $110. What is his debt-payments-to-income ratio?

Answer 1

His debt-payments-to-income ratio is 53.6%

Step-by-step explanation:

According to give data we have that the Income = $5,200

In order to calculate his debt-payments-to-income ratio we have to calculate first the debt payment as follows:

Debt payment = auto loan payment + student loan payment +mortgage payment +credit card payment = $675+$345+$1,660+$110 = $2,790

Therefore, Debt payment to income ratio = Debt payment / income = $2,790/$5,200 = 0.536 = 53.6%

His debt-payments-to-income ratio is 53.6%