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Louise’s monthly gross income is $2,800. Her employer withholds $560 in federal, state, and local income taxes and $224 in Social Security taxes per month. Louise contributes $112 per month for her IRA. Her monthly credit payments for Visa, MasterCard, and Discover cards are $44, $34, and $21, respectively. Her monthly payment on an automobile loan is $355. (a) What is Louise’s debt payments-to-income ratio? (Enter your answer as a percent rounded to 1 decimal place.)

Answer

Louise, your monthly debt payments-to-income ratio is currently 22.3%. Based on your monthly gross income of $2,800, your employer withholds $560 for federal, state, and local income taxes and $224 for Social Security taxes per month. You also contribute $112 per month to your IRA. Your Visa, Mastercard, and Discover credit card payments total $44, $34, and $21, respectively, and your monthly automobile loan payment is $355, making your total debt payment equal to $454. Additionally, your total amount of taxes and IRA contribution is $896, which means your net income per month is $1,904. To calculate your debt payments-to-income ratio, we divide your total debt payments by your net income and multiply by 100%. Using these values, we can see that your DPI ratio is approximately 22.3%. If you want to learn more about managing monthly debt, feel free to click on the link below: brainly.com/question/14064255# #SPJ11