Question

Given the expenses and income below, what is the debt-to-Income ratio? Monthly expenses: Mortgage (including all housing costs) = $1,982 Student loan = $258 Minimumcredit card payments = $184 Home equity loan = $237 Monthly income: Salary = 54,115 Bonus = $700 Side business = $1,000 Dividends/interest = $9528.3%36.1%35.5%45.0%None of these choices are correct.

Answer 1

The debt-to-income ratio is the division between the sum of all debts and the sum of income.

Debt: $1,982 + $258 + $184 + $237 = $2,661.

Income: $4,115 + $700 + $1,000 + $95 = $5,910.

Then,

$r=\frac{2,661}{5,910}=0.45$

Hence, the ratio is 45%.