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01.07.2022 - 08:40

A person has a $1200 monthly mortgage payment, a $400 monthly car payment, and a $300 monthly student loan payment. Their monthly income is $6000. What is their debt ratio?

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A person has a $1200 monthly mortgage payment, a $400 monthly car payment, and a $300 monthly student loan payment. Their monthly income is $6000. What is their debt ratio?

Answers (0)

Teresa April 17, 2023 в 11:46

The person's total monthly debt payments are $1900 ($1200 + $400 + $300). To calculate their debt ratio, we divide their total monthly debt payments by their monthly income and multiply by 100 to get a percentage. $1900 ? $6000 = 0.3167 0.3167 x 100 = 31.67% Therefore, their debt ratio is 31.67%. This means that 31.67% of their monthly income goes towards paying off their debts. A good rule of thumb is to keep this ratio below 36%.

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