Question

cindy would like to apply for a loan but knows that her debt-to-income (dti) ratio will keep her from being approved. her monthly expenses include an \\$800 rent payment, a \\$230 car payment, a \\$175 student loan payment and a \\$160 minimum payment for all three of her credit cards combined. her current gross monthly income is \\$2,900.

what minimum additional gross monthly income does cindy need to get her dti down to 36%?
a. \\$252.78
b. \\$405.56
c. \\$447.22
d. \\$891.67

Explanation:

Calculate total monthly debt payments

Using the Debt-to-Income Ratio knowledge point

$$ \text{Total Debt} = \$800 + \$230 + \$175 + \$160 = \$1,365 $$

Determine required gross monthly income

Using the Debt-to-Income Ratio and Monthly Gross Income knowledge points

$$
LATEXBLOCK0
$$

Calculate additional gross monthly income needed

Using the Monthly Gross Income knowledge point

$$
LATEXBLOCK1
$$

Answer:

• a. $252.78
• b. $405.56
• c. $447.22
• d. $891.67 (Correct answer)