Question

kurtis is expecting a promotion which, hopefully, comes with a raise. he would like his raise to help him correct a high debt-to-income (dti) ratio of 43%. his current annual salary is $53,000. how much of a raise would kurtis need applied to his annual salary to get his dti ratio down to a more reasonable 36%?
a. $4,437
b. $8,627
c. $10,305
d. $63,305

Explanation:

Calculate current monthly gross income

Using the Debt-to-Income Ratio knowledge point

$$ \text{Current Monthly Gross Income} = \frac{\$53,000}{12} \approx \$4,416.67 $$

Determine monthly debt obligations

Using the Debt-to-Income Ratio knowledge point

$$
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$$

Calculate required monthly gross income

Using the Debt-to-Income Ratio knowledge point

$$
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$$

Calculate required annual salary

Using the Debt-to-Income Ratio knowledge point

$$
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$$

Calculate required annual raise

Using the Debt-to-Income Ratio knowledge point

$$
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$$

Answer:

• a. $4,437
• b. $8,627
• c. $10,305 (Correct answer)
• d. $63,305