Question

andy's yearly income $40,000. according the 20/10 rule, what would andys debt be on a $15,000 personal loan? would andys debt loan follow the guidlines of the 20/10 rule? provide a reason for your answer

Answer 1

Answer:

Andy is not following the guidelines because his total Loan amount is 37.5% of of Total annual income which should be below 20%.

Explanation:

20/10 Rule

According to this rule your total debt should be below 20% of annual income and and keep your all payments of loan no more than 10% of your monthly income.

As per Rule:

(Total debt / Total annual income)*100 = (15000/40000)*100= 37.5%