Finance

posted by Janey

THe dumonts take- home pay ( after deductions for taxes and benefits ) is approximately $6045 monthly. currently nonmortgage debt payments equal $911 (i.e, $405 auto, $100 miscellaneous credit, $196 student loan, and $210 furniture). calculate and interpret their debt ratio. Assume they could purchase another auto with a $300 monthly payment. calculate and interpret their revised debt ratio. what advice would you give the dumonts about purchasing another vehicle?

  1. Henry

    a. RATIO = 911/6045 = 0.151 = 15.1%.
    The max allowed is 43%. So 15% is very
    good.

    b. RATIO = (911+300)/6045 = 0.200 = 20%.
    The ratio is still good. Therefore, they could easily purchase another vehicle.

Respond to this Question

First Name

Your Answer

Similar Questions

  1. math

    You'd also need to know the interest rate, the amount of the monthly payments, and how long you'll have to pay off the loan. The shorter period of time for the loan, the less you'll pay in interest, but the monthly payments will be …
  2. Math

    please help me I am not really sure about this please check answer thanks :) Mary has decided to purchase furniture. She has 2 choices she can pay the full amount of $4,200.The other choice is to finance the furniture for two years …
  3. Math

    Mr. and Mrs Smith have decided to buy new furniture. They have 2 options. The first is to pay cash of $4,200.00, the second is to finance with a 2 year installment loan. They would have to put down 12% with 24 equal payments of $195.00. …
  4. business math

    financing furniture that costs $4200.00 with a two year installment loan. The loan requires a 12% down payment and 24 equal monthly payments of $195.00. According to this information, what would be the finance charge on the loan?
  5. math

    Wallace and Sarah purchased furniture for their new home. They had two payment options. The first option is to pay a cash payment of $4200. The second option is to finance the furniture with a two year installment loan. The loan requires …
  6. Business Finance

    Cassandra is repaying an installment loan of $3500 with 20 equal monthly payments of $196 each. What is the annual percentage rate of the loan?
  7. finance

    You take out a 25-year $210,000 mortgage loan with an APR of 12% and monthly payments. In 16 years you decide to sell your house and pay off the mortgage. What is the principal balance on the loan?
  8. real estate finance

    I need to find the mortgage loan amount and can't remember how to do it. The borrowers have a combined gross monthly income of $50,400. Sale price is $190,000 and buyers are able to obtain a 90% conventional FNMA/FHLMC loan at 4 3/4% …
  9. Personal Finance

    PLEASE HELP ME ASAP!!!!!!!!!!!! 32. Which is not a horrible mortgage option?
  10. Personal Finance

    Freddie Sue has a monthly gross income of $2950 and total monthly debt payments of $160. She will have to make a down payment of 15% of the purchase price of a new home and estimates that the monthly property tax and insurance cost …

More Similar Questions