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Personal Finance 1st Edition by Jack R. Kapoor
Edition 1ISBN: 1308231393Personal Finance 1st Edition by Jack R. Kapoor
Edition 1ISBN: 1308231393Determining the Debt Payments–to–Income Ratio. Louise McIntyre’s monthly gross income is $2,000. Her employer withholds $400 in federal, state, and local income taxes and $160 in Social Security taxes per month. Louise contributes $80 per month for her IRA. Her monthly credit payments for Visa, MasterCard, and Discover cards are $35, $30, and $20, respectively. Her monthly payment on an automobile loan is $285. What is Louise’s debt payments–to–income ratio? Is Louise living within her means? Explain. (Obj. 3)
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Step 1 of 4
| Monthly gross income | |
| Income taxes | |
| Social security tax | |
| IRA | |
| Visa card payment | |
| Master card payment | |
| Discover card payment | |
| Automobile Loan | |
2,000
400
160
80
35
30
20
285L’s Gross income is $2,000
Net take home pay can be calculated by the formula:
Substitute the values in the formula:
Net take home pay of L is $1,360
Step 2 of 4
Step 3 of 4
Step 4 of 4
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