Question

because he wants to be sure his new tenant pays the rent on time and in full. the table below summar information that was on their applications.
application information
questions jaina tomas
how many years have you had your job? 5 2
what is your monthly salary? $1,850 $2,500
how many credit cards do you have? 4 1
how much debt do you have? $13,000 $7,000
how many times were you late with payments on credit cards in the past year? 5 1
who will the landlord decide to be more creditworthy and why?
○ tomas because the ratio of his debt to income is less.
○ jaina because she has had her job longer, which makes her look more stable.
○ jaina because she has more credit cards available to her.
○ tomas because he makes more money per month.

Explanation:

To determine creditworthiness, we calculate the debt - to - income ratio for both Jaina and Tomas. The debt - to - income ratio is calculated as $\frac{\text{Debt}}{\text{Monthly Salary}\times12}$ (annual income).

For Jaina:
Monthly salary = $1,850, so annual income = $1,850×12 = $22,200.
Debt = $13,000.
Debt - to - income ratio=$\frac{13000}{22200}\approx0.586$.

For Tomas:
Monthly salary = $2,500, so annual income = $2,500×12 = $30,000.
Debt = $7,000.
Debt - to - income ratio=$\frac{7000}{30000}\approx0.233$.

Tomas has a lower debt - to - income ratio. Let's also analyze the other options:

• Option about Jaina having a longer job: Job length is not the main factor for creditworthiness here as debt - to - income is more relevant.
• Option about more credit cards: More credit cards do not imply better creditworthiness, in fact, it can be a risk factor.
• Option about more monthly money: Even though Tomas has a higher monthly salary, the key is the debt - to - income ratio. Since Tomas's debt - to - income ratio is less, he is more creditworthy.

Answer:

A. Tomas because the ratio of his debt to income is less.