Lee is trying to decide whether she can afford a loan she needs in order to go t

Question

Lee is trying to decide whether she can afford a loan she needs in order to go to chiropractic school. Right now Kim is living at home and works in a shoe store, earning a gross income of $2490 per month. Her employer deducts a total of $150 for taxes from her monthly pay. Kim also pays $85 on credit card debt each month. The loan she needs for chiropractic school will cost an additional $170 per month. Calculate her debt payments-to-income ratio with college loan. Don't forget to convert your answer to a percentage

Explanation / Answer

Per month: Gross Income 2490 Debt Payment: Credit card payment 85 Loan Payment 170 255 Debt Payment-to-Income ratio = Debt Payment/Income = 255/2490 = 10%

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