Christine just finished her first year of work following graduation, and she fee

Question

Christine just finished her first year of work following graduation, and she feels it is time she assess her financial situation. Her annual gross income is $45,000, and her income after taxes is $35,800. She has the following liabilities. What is Christine's debt safety ratio, and what does it say about Christine's financial situation? show work please

Balance Payment
Auto loan $ 6,000 $ 265
Education loan $10,000 $ 250
Credit card debt $ 1,200 $ 58
Personal line of credit $ 3,900 $ 195
Home mortgage $75,000 $ 550

Explanation / Answer

Add up all the monthly payments you must make. 265+250+58+195+550=$1,318 Now figure out the monthly income after taxes $35,800/12= $2,983.33 Now divide debt by income $1,318/$2,983.33=0.44 The debt safety ratio is 0.44 or 44%. It says that Christine's financial situation is really bad. A good debt safety ratio is around 0.2 or lower. Hopefully this helped, best of luck. :)

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.