Question

using the 28/36 ratio, determine the maximum allowable recurring debt for someone with an annual income of $86,250.

Answer 1

Given:
28/36 ratio
annual income: 86,250

28+36 = 64

28/64 * 86,250 = 0.4375 * 86,250 = 37,734.375
36/64 * 86,250 = 0.5625 * 86,250 = 48,515.625

28/36 ⇒ 37,734.375/48,515.625

Answer 2

a. $575.00

good luck!