Concept explainers
The debt-to-income ratio and if Mateo would qualify for the loan.
Answer to Problem 59CR
The debt-to-income ratio is 0.3878. As it is more than 0.35, Mateo will not qualify for the loan.
Explanation of Solution
Given information:
The expenses given, for rent = $1850, for car payment = $200, for credit card = $50, for student loan = $100. The income given, salary = $5673.
Calculation:
Total expenses = Rent + car payment + credit card + student loan
= $
Salary given = $5673
Debt-to-income ratio
= (Total debt
0.3878 is more than 0.35.
Mateo will qualify for the loan if his debt-to-income ratio is less than 0.35.
As it is more than 0.35, Mateo will not qualify for the loan.
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