MINDTAP FINANCE FOR GARMAN/FORGUE'S PER
13th Edition
ISBN: 9781337288347
Author: FORGUE
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 6, Problem 2DTM
Buying a Vacation Home. Barrie and Inga Adlington, of Birmingham, England, have just finished putting their three daughters through college. As empty-nesters, they are considering purchasing a vacation home in the United States on a lake because prices have dropped in recent years. The house might also serve as a retirement home once they retire in 6 years. The Adlingtons’ net worth is $383,000 including their home worth about $265,000 on which they currently owe $43,000 for their first mortgage, with a $778 per month payment. Their outstanding debts in addition to their mortgage include $12,500 on one car loan ($256 monthly payment), $13,700on a second car loan ($287 monthly payment), and a $25,000 second mortgage on their home taken out to help pay for their daughters’ college expenses ($187 monthly payment). Their income is $100,000.
- Calculate the Adlingtons’ debt-to-income ratio.
- Advise them as to the wisdom of borrowing to buy a vacation home at this time.
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Barrie and Inga Adlington are considering purchasing a vacation home in the United States on a lake because prices have dropped in recent years. The house might also serve as a retirement home once they retire in 6 years. The Adlingtons' net worth is $384,000 including their home worth about $264,000 on which they currently owe $44,000 for their first mortgage, with a $751 per month payment. Their outstanding debts in addition to their mortgage include $12,500 on one car loan ($259 monthly payment), $13,500 on a second car loan ($284 monthly payment), and a $25,500 second mortgage on their home taken out to help pay for their daughters' college expenses ($184 monthly payment). Their income is $120,000.
1. Calculate the Adlingtons' debt-to-income ratio. Round your answer to two decimal places.
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Chapter 6 Solutions
MINDTAP FINANCE FOR GARMAN/FORGUE'S PER
Ch. 6.1 - Prob. 1CCCh. 6.1 - Prob. 2CCCh. 6.1 - Prob. 3CCCh. 6.1 - Prob. 4CCCh. 6.2 - Distinguish among the continuous debt method,...Ch. 6.2 - Prob. 2CCCh. 6.2 - Prob. 3CCCh. 6.2 - Prob. 4CCCh. 6.3 - Prob. 1CCCh. 6.3 - Prob. 2CC
Ch. 6.3 - Prob. 3CCCh. 6.3 - Prob. 4CCCh. 6.3 - Prob. 5CCCh. 6.4 - Prob. 1CCCh. 6.4 - Prob. 2CCCh. 6.4 - Prob. 3CCCh. 6.4 - Distinguish between Chapter 7 and Chapter 13...Ch. 6 - Prob. 1DTMCh. 6 - Buying a Vacation Home. Barrie and Inga Adlington,...Ch. 6 - Prob. 3DTMCh. 6 - The Johnsons Attempt to Resolve Their Credit and...Ch. 6 - Victor and Maria Advise Their Niece Victor and...Ch. 6 - Julia Price Thinks About a Loan to Buy an Inboard...Ch. 6 - Prob. 4FPCCh. 6 - Cousins Discuss Their Debt Situations Melinda...Ch. 6 - Prob. 6FPC
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