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Elden [556K]
3 years ago
12

Kim is trying to decide whether she can afford a loan she needs in order to go to chiropractic school. Right now Kim is living a

t home and works in a shoe store, earning a gross income of $1,760 per month. Her employer deducts $199 for taxes from her monthly pay. Kim also pays $189 on several credit card debts each month. The loan she needs for chiropractic school will cost an additional $172 per month. Help Kim make her decision by calculating her debt payments-to-income ratio with and without the college loan.
Required:
a. Carl’s house payment is $1,640 per month and his car payment is $482 per month. If Carl's take-home pay is $3,250 per month, what percentage does Carl spend on his home and car?
b. Suppose that your monthly net income is $2,850. Your monthly debt payments include your student loan payment and a gas credit card. They total $1,140. What is your debt payments-to-income ratio?
Business
1 answer:
andriy [413]3 years ago
8 0

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%

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Responsibility accounting report for the snowmobile department.

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Supplies used   3,670-3850= -180

Depreciation- Equip.6,500 -6,500 =0

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