Answer:
7.20 %
Explanation:
Debt to income ratio is a measure of an individual's monthly debt repayment ability. The ratio is used in assessing the individual capability of absorbing more debts.
It is calculated by the formula.
Debt to income ratio = Total of Monthly Debt Payments/Gross monthly income x 100.
Total monthly debt is the aggregate or all debts payable on a monthly basis.
Gross income is the income before any deductions.
For Derek, gross income =$5900
Monthly debts =monthly credit card of $425
DTI= $425/ $ 5900 X 100
=0.0720 X 100
=7.20 %
