Calculate her debt payments-to-income ratio with and without the college loan. (Remember the 20 percent rule.) (Enter your answers as a percent rounded to 2 decimal places.)
Calculate her debt payments-to-income ratio with and without the college loan. (Remember the 20 percent rule.) (Enter your answers as a percent rounded to 2 decimal places.)
Chapter7: Credit Cards And Consumer Loans
Section: Chapter Questions
Problem 1FPC
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3
Transcribed Image Text:Madeline Rollins is trying to decide whether she can afford a loan she needs in order to go to chiropractic school. Right now, Madeline
is living at home and works in a shoe store, earning a gross income of $1,300 per month. Her employer deducts a total of $340 for
taxes from her monthly pay. Madeline also pays $200 on several credit card debts each month. The loan she needs for chiropractic
school will cost an additional $310 per month.
Calculate her debt payments-to-income ratio with and without the college loan. (Remember the 20 percent rule.) (Enter your answers
as a percent rounded to 2 decimal places.)
Debt Payments-to-
Income Ratio
With college loan
%
Without college loan
20.83 %
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