Question

Mike and Mary Jane Lee have a yearly income of ​$71 comma 128 and own a house worth ​$109 comma 000​, two cars worth a total of $ 19 comma 286 and furniture worth ​$9 comma 679. The house has a mortgage of ​$56 comma 936 and the cars have outstanding loans of ​$2 comma 538 each. Utility​ bills, totaling ​$170 for this​ month, have not been paid. Calculate the debt ratio for the Lee household.

Answer 1

Answer:

Explanation:

Debt ratio for the Lee household =  Total Liabilities/ Total Monthly  Income

= 2,538+ 2,538 + 170+ 56936/ 71,128/ 12= 62,182/5927= 10.49

In other words Mike and Mary Jane Lee have a monthly Debt ratio of 1049 %

Which is very high

Debt ratio for the Lee household =  Total Liabilities/ Total Yearly Income

= 2,538+ 2,538 + 170+ 56936/ 71,128= 62,182/71,128= 0.87

there are number of ways of calculating Debt ratios.

In other words Mike and Mary Jane Lee have a yearly Debt ratio of 87%