Carl’s house payment is $2,574 per month and his car payment is $871 per month. If Carl's take-home pay is $5,200 per month, what percentage does Carl spend on his home? (Enter your answer as a percent rounded to 1 decimal place.)
Carl’s house payment is $2,574 per month and his car payment is $871 per month. If Carl's take-home pay is $5,200 per month, what percentage does Carl spend on his home? (Enter your answer as a percent rounded to 1 decimal place.)
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter10: Individuals: Income, Deductions, And Credits
Section: Chapter Questions
Problem 16P
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Carl’s house payment is $2,574 per month and his car payment is $871 per month. If Carl's take-home pay is $5,200 per month, what percentage does Carl spend on his home? (Enter your answer as a percent rounded to 1 decimal place.)
Expert Solution
Step 1: Introduction
House Payment to income ratio is the ratio which calculates the amount spend from your monthly income towards your home loan. This number is one way lenders measure your ability to manage the monthly payments to repay the money you plan to borrow.
The formula to calculate House Payment to income ratio:
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