Question

Cindy would like to apply for a loan but knows that her debt-to-income (DTI) ratio will keep her from being approved. Her monthly expenses include an $800 rent payment, a $230 car payment, a $175 student loan payment and a $160 minimum payment for all three of her credit cards combined. Her current gross monthly income is $2,900. What minimum additional gross monthly income does Cindy need to get her DTI down to 36%?

Answer 1

Answer:

$891.67

Step-by-step explanation:

Answer 2

Given that her gross monthly income is $2,900.

Her expenses are given as follows:-

#Rent payment = $800.

#Car payment = $230.

#Student loan payment = $175.

#Credit card payment = $160.

Total expenses = $800 + $230 + $175 + $160 = $1,365.

Let's assume she need '$x' as minimum additonal monthly income to get DTI < 36%.

So, her debt = $1,365 and her income = $(2,900+x).

Debt-to-Income ratio would be 1365/(2900+x).

$DTI=\frac{1365}{2900+x}$

Hence, Cindy needs $891.67 as an additional gross monthly income to get DTI < 36%.