Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN: 9780357033609
Author: Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher: Cengage Learning
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Chapter 6, Problem 3FPE
Summary Introduction
To identify: The debt safety ratio of Person C and the amount of monthly debt payment at given monthly take-home pay and 12.5% debt safety ratio. The monthly take-home pay of Person C at given amount of monthly debt payment and 12.5% debt safety ratio
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Katherine Hunt is evaluating her debt safety ratio. Her monthly take-home pay is $3,160. Each month, she pays $350 for an auto loan, $90 on a personal line of credit, $80 on a department store charge card, and $105 on her bank credit card. Complete Worksheet 6.1 by listing Katherine's outstanding debts, and then calculate her debt safety ratio. Round the answer to 1 decimal place. Enter debt safety ratio as a percentage.
%
Given her current take-home pay, what is the maximum amount of monthly debt payments that Katherine can have if she wants her debt safety ratio to be 12.5 percent? Round the answer to the nearest dollar.
$
Given her current monthly debt payment load, what would Katherine's take-home pay have to be if she wanted a 12.5 percent debt safety ratio? Round the answer to the nearest dollar.
$
Alyssa Clark is evaluating her debt safety ratio. Her monthlytake- home pay is $3,320. Each month, she pays $380 for an auto loan, $120 on a personal line of credit, $60 on a department store charge card, and $85 on her bank credit card. Complete Worksheet 6.1 by listing Alyssa’s outstanding debts, and then calculate her debt safety ratio. Given her current take-home pay, what is the maximum amount of monthly debt payments that Alyssa can have if she wants her debt safety ratio to be 12.5 percent? Given her current monthly debt payment load, what would Alyssa’s take-home pay have to be if she wanted a 12.5 percent debt safety ratio?
Chloe Young is evaluating her debt safety ratio. Her monthly take-home pay is $3,320. Each month, she pays $380 for an auto loan, $120 ona personal line of credit, $60 on a department store charge card, and $85 on her bank credit card. Complete Worksheet 6.1 by listing Chloe’s outstanding debts, and then calculate her debt safety ratio. Given her current take-home pay, what is the maximum amount of monthly debtpayments that Chloe can have if she wants her debt safety ratio to be 12.5 percent? Given her current monthly debt payment load, what would Chloe’s take-home pay have to be if she wanted a 12.5 percent debt safety ratio?
Chapter 6 Solutions
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
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- Evaluate the Debt Safety Ratio using worksheet 6.1: By listing Chloe’s outstanding debts, and then calculate her debt safety Given her current take-home pay, what is the maximum amount of monthly debt payments that Chloe can have if she wants her debt safety ratio to be 12.5 percent? Given her current monthly debt payment load, what would Chloe’s take-home pay have to be if she wanted a 12.5 percent debt safety ratio? Chloe Young is evaluating her debt safety ratio. Her monthly take- home pay is $3,320. Each month, she pays $380 for an auto loan, $120 on a personal line of credit, $60 on a department store charge card, and $85 on her bank credit card.arrow_forward4 Diana Wade is evaluating her debt safety ratio. Her monthly take-home pay is $3,320. Each month, she pays $380 for an auto loan, $120 on a personal line of credit, $60 on a department store charge card, and $85 on her bank credit card. Complete Worksheet 6.1 by listing Diana’s outstanding debts, and then calculate her debt safety ratio. Given her current take-home pay, what is the maximum amount of monthly debt payments that Diana can have if she wants her debt safety ratio to be 12.5 percent? Given her current monthly debt payment load, what would Diana’s take-home pay have to be if she wanted a 12.5 percent debt safety ratio?arrow_forwardNatalia has a monthly net income of $1,400. She has a house payment of $600 per month, a car loan with payments of $300 per month, a Visa card with payments of $60 per month, and a credit card with a local department store with payments of $32 per month. What is Natalia’s debt payment-to-income ratio? Is she within range of what experts suggest you spend on consumer credit payments?arrow_forward
- Chris and Karen have a combined take-home income of $5,000. Their total monthly payments on consumer debt are $875. What is their debt safety ratio? Are they exhibiting any sign of approaching credit problems?arrow_forwardMiss Evilla borrowed money from a bank. She receives from the bank P1,340.00 and promised to pay P1,500.00 at the end of 9 months. Determine the corresponding discount rate or often referred to as the “banker’s discount”?arrow_forwardTallolah has a credit card through BestBank. Her credit card has a $5,000.00 limit and has a 15% APR. Her balance at the end of the April is $350.00. Her average daily balance was $88.00. If Tallolah pays the entire balance, how much interest will be added to her next bill? If Tallulah pays $50 (of the $350 bill), how much interest will be added to her next bill if her bank uses the unpaid balance method?arrow_forward
- Kevin Mills has a monthly take-home pay of $3,315; he makes payments of $430 a month on his outstanding consumer credit (excluding the mortgage on his home). How would you characterize Kevin's debt burden? Assume that the debt safety ratio below 10% is considered low, below 15% - manageable, and the maximum acceptable debt safety ratio is 20%.arrow_forwardJacque's total monthly loan payments are 1020 while her gross income is 3939 per month. What is her debt service ratio?arrow_forwardJuanita has good credit and gets the lowest interest rate possible for her credit card. She has a balance of $982 on her January statement. What is her periodic rate?arrow_forward
- Evaluating debt safety ratio. Use Worksheet 6.1. Chloe Young is evaluating her debt safety ratio. Her monthly take- home pay is $3,320. Each month, she pays $380 for an auto loan, $120 on a personal line of credit, $60 on a department store charge card, and $85 on her bank credit card. Complete Worksheet 6.1 by listing Chloe’s outstanding debts, and then calculate her debt safety ratio. Given her current take-home pay, what is the maximum amount of monthly debt payments that Chloe can have if she wants her debt safety ratio to be 12.5 percent? Given her current monthly debt payment load, what would Chloe’s take-home pay have to be if she wanted a 12.5 percent debt safety ratio?arrow_forwardTranslate to a system of equations and solve. After four years in college, Josie owes $65,800 in student loans. The interest rate on the federal loans is 4.5% and the rate on the private bank loans is 2%. The total interest she owes for one year was $2,728.50. What is the amount of each loan? federal loans private bank loansarrow_forwardMany consumers carry a balance each month on their credit cards and make minimal payments towards their debt. Joe makes monthly (end-of-month)payments of $251.22 on his credit card and is being charged 23.77%, coumpounded daily interest. How much credit card debt does Joe have today? Suppose the credit card company amortizes the debt 6 years. Please need asap today. Thank youarrow_forward
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