Lori earns $3,898 per month. She has a monthly rent payment of $980 along with average credit card payments of $325 and student loan payments of $250. She wants to finance a car but needs to determine her maximum car payment to keep her back end DTI at 39%. What would this payment be?

Lori earns $3,898 per month. She has a monthly rent payment of $980 along with average credit card payments of $325 and student loan payments of $250. She wants to finance a car but needs to determine her maximum car payment to keep her back end DTI at 39%. What would this payment be?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 69P

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

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