Question

Nico's net take-home pay per month is $2,100. What is the maximum dollar amount of debt payments, excluding a home mortgage, he should have

Answer 1

The answer here is $420 that should be with Nico.

According to experts, one shouldn't pay more than 20% of net income (i.e., after-tax) toward debt. So, 20% of $2100 is $420. So, the maximum dollar amount of debt payments he should have is $420.

Anything owing by one party to another is a debt. Debt may be secured by real estate, cash, services, or another kind of payment. Debt in the context of finance is more specifically defined as funds obtained via the issuing of bonds. An arrangement wherein one person loans money to another is known as a loan, which is a type of debt.

Therefore he should have $420 to pay off his debt.

To know more about debt payment click here:

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