To compare: The results of the two metrics and the way Luciana qualify at both banks.
Answer to Problem 1CGP
Luciana does not qualify for a loan at National Road Bank, but at New Savings Bank, she does.
She should decrease her monthly expenses to qualify for a loan at National Road bank.
Explanation of Solution
Given information:
Monthly expenses of Luciana
Monthly income of Luciana
Monthly mortgage payment of Luciana
Calculation:
Debt-to-income ratio
Because the ratio is greater than
Mortage-to-income ratio
Because the ratio is less than
Luciana does not qualify for a loan at National Road Bank, but at New Savings Bank, she does. To qualify for a loan at National Road bank, the debt-to-income ratio should be less than
Chapter 1 Solutions
Algebra 1, Homework Practice Workbook (MERRILL ALGEBRA 1)
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