Answer:
1. Kim:
Debt payments-to-income ratio with the college loan
= 23%
2. Carl:
Percentage spent on home and car
= 65.3%
3. Debt payment to income ratio
= 40%
Explanation:
Kim's Data and Calculations:
Gross income = $1,760
Income taxes -199
After Tax Income $1,561 per month
Credit card debts = $189 per month
School loan = $172 per month
Total Debt payments = $361
Debt payments-to-income ratio with the college loan
= $361/$1,561 = 23%
Carl:
House payment = $1,640
Car payment = $482
Total payments = $2,122
Take-home pay = $3,250
Percentage spent on home and car = 65.3% ($2,122/$3,250 * 100)
3. My monthly net income = $2,850
Monthly debt payments = $1,140
Debt payment to income ratio
= $1,140/$2,850 * 100
= 0.4
= 40%
