Affan Chawdry has monthly net income of $1,050. He has a house payment of $450 per month, a car loan with payments of $250 per month, a Visa card with payments of $50 per month, and a credit card with a local department store with payments of $100 per month. What is Affan's debt payments-to-income ratio?
A) 2.63
B) 1.24
C) 0.81
D) 0.38
E) 0.50

Question

Quizplus · Accepted Answer

The debt payments-to-income ratio is calculated by dividing total monthly debt payments by monthly net income. Affan's total monthly debt payments are $450 + $250 + $50 + $100 = $850. The ratio is $850 / $1,050 = 0.81.

Affan Chawdry Has Monthly Net Income of $1,050