Question

V

Use Worksheet 6.1. Alyssa Clark is evaluating her debt safety ratio. Her monthly take-home pay is $2,710. Each month, she pays $280 for an auto loan, $110 on a personal line of credit, $80 on a department store charge card, and $105 on her bank credit card. Complete Worksheet 6.1 by listing Alyssa's outstanding debts.

1. Calculate her debt safety ratio. Round the answer to 1 decimal place. Enter debt safety ratio as a percentage.
   %
   
2. Given her current take-home pay, what is the maximum amount of monthly debt payments that Alyssa can have if she wants her debt safety ratio to be 12.5%? Round the answer to the nearest dollar.
   $  
   
3. Given her current monthly debt payment load, what would Alyssa's take-home pay have to be if she wanted a 12.5% debt safety ratio? Round the answer to the nearest dollar.
   $  

Answer 1

	Debt safety ratio			=	(Monthly debt payment/montly take home pay)*100
	Monthly home take away			=	$2,710
	Monthly debt payment			=	280+110+80+105
				=	575
a)	Debt safety ratio			=	(575/2710)*100
				=	21.22%
b)	If debt ratio is 12.5 % maximum debt can be
			12.5	=	(monthly debt/2710)*100
			0.125	=	monthly debt/2710
		monthly debt		=	$338.75
c)	If debt ratio is 12.5 % ,home take pay should be
			12.5	=	(575/home take pay)*100
		Home take pay		=	$4,600
	Please upvote