PFIN 7:STUDENT EDITION-MINDTAP (1 TERM)
7th Edition
ISBN: 9780357033647
Author: Billingsley
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 6, Problem 2FPE
Summary Introduction
To identify: The nature of debt burden of Person T
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Evaluating debt burden. Ted Phillips has a monthly take-home pay of $1,685; he makes payments of $410 a month on his outstanding consumer credit (excluding the mortgage on his home). How would you characterize Isaac’s debt burden? What if his take-home pay were $850 a month and he had monthly credit payments of $150?
Ted Phillips has monthly take-home pay of $1,685; he makes payments of $410 a month on his outstanding consumer credit (excluding the mortgage on his home). How would you characterize Ted’s debt burden? What if his take-home pay were $850 a month and he had monthly credit payments of$150?
Ted Phillips has monthly take-home pay of $1,200; he makes payments of $450 a month on his outstanding consumer credit (excluding the mortgage on his home). How would you characterize Ted's debt burden?
Chapter 6 Solutions
PFIN 7:STUDENT EDITION-MINDTAP (1 TERM)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Kevin Mills has a monthly take-home pay of $3,315; he makes payments of $430 a month on his outstanding consumer credit (excluding the mortgage on his home). How would you characterize Kevin's debt burden? Assume that the debt safety ratio below 10% is considered low, below 15% - manageable, and the maximum acceptable debt safety ratio is 20%.arrow_forwardAlyssa Clark is evaluating her debt safety ratio. Her monthlytake- home pay is $3,320. Each month, she pays $380 for an auto loan, $120 on a personal line of credit, $60 on a department store charge card, and $85 on her bank credit card. Complete Worksheet 6.1 by listing Alyssa’s outstanding debts, and then calculate her debt safety ratio. Given her current take-home pay, what is the maximum amount of monthly debt payments that Alyssa can have if she wants her debt safety ratio to be 12.5 percent? Given her current monthly debt payment load, what would Alyssa’s take-home pay have to be if she wanted a 12.5 percent debt safety ratio?arrow_forward4 Diana Wade is evaluating her debt safety ratio. Her monthly take-home pay is $3,320. Each month, she pays $380 for an auto loan, $120 on a personal line of credit, $60 on a department store charge card, and $85 on her bank credit card. Complete Worksheet 6.1 by listing Diana’s outstanding debts, and then calculate her debt safety ratio. Given her current take-home pay, what is the maximum amount of monthly debt payments that Diana can have if she wants her debt safety ratio to be 12.5 percent? Given her current monthly debt payment load, what would Diana’s take-home pay have to be if she wanted a 12.5 percent debt safety ratio?arrow_forward
- Andy's yearly income is $40,000. What would Andy's debt load be on a $15,000 personal loan? Would Andy's debt load follow the guidelines of the 20/10 rule? Provide a reason for Your answer.arrow_forwardCorrect answer needed with step by step explanation.arrow_forwardKatherine Hunt is evaluating her debt safety ratio. Her monthly take-home pay is $3,160. Each month, she pays $350 for an auto loan, $90 on a personal line of credit, $80 on a department store charge card, and $105 on her bank credit card. Complete Worksheet 6.1 by listing Katherine's outstanding debts, and then calculate her debt safety ratio. Round the answer to 1 decimal place. Enter debt safety ratio as a percentage. % Given her current take-home pay, what is the maximum amount of monthly debt payments that Katherine can have if she wants her debt safety ratio to be 12.5 percent? Round the answer to the nearest dollar. $ Given her current monthly debt payment load, what would Katherine's take-home pay have to be if she wanted a 12.5 percent debt safety ratio? Round the answer to the nearest dollar. $arrow_forward
- Chris and Karen have a combined take-home income of $5,000. Their total monthly payments on consumer debt are $875. What is their debt safety ratio? Are they exhibiting any sign of approaching credit problems?arrow_forwardBhupatbhaiarrow_forwardYou are a first-time homeowner and know you will only prequalify for an FHA loan. Your monthly gross income is $2,000. What is this minimum amount of recurring debt you are currently able to handle? (round to the nearest dollar) {DO NOT INCLUDE COMMAS AND $}arrow_forward
- You are a mortgage broker at Interamerican Bank. One of your clients, Bill Cramer, has submitted an application for a mortgage with a monthly PITI of $1,259. His other financial obligations total $654.50 per month. Bill earns a gross income of $4,890 per month. a. What is his housing expense ratio? b. What is his total obligations ratio? c. According to the lending ratio guidelines (given in this secion of your text), for what type of mortgage would Bill qualify, if any? d. If Bill decided to get a part time job so that he could qualify for a conventional mortgage, how much additional monthly income would he need?arrow_forwardNatalia has a monthly net income of $1,400. She has a house payment of $600 per month, a car loan with payments of $300 per month, a Visa card with payments of $60 per month, and a credit card with a local department store with payments of $32 per month. What is Natalia’s debt payment-to-income ratio? Is she within range of what experts suggest you spend on consumer credit payments?arrow_forward12. Ted has an adjusted gross income of $120,006. He wants a house with a monthly mortgage payment of $1,921 and annual property taxes of $7,112. His semiannual homeowner's premium would be $897. Ted has a credit card bill that averages $300 per month. a. What is the back-end ratio to the nearest percent? the front-end ratio? b. Assume that his credit rating is good. Based on the back-end ratio, would the bank offer him a loan? Explain. c. Based on the front-end ratio, would the bank offer him a loan? Explain.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Pfin (with Mindtap, 1 Term Printed Access Card) (...FinanceISBN:9780357033609Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning
PFIN (with PFIN Online, 1 term (6 months) Printed...FinanceISBN:9781337117005Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning
Pfin (with Mindtap, 1 Term Printed Access Card) (...
Finance
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning
PFIN (with PFIN Online, 1 term (6 months) Printed...
Finance
ISBN:9781337117005
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning