Question

how is the debt-to-income ratio calculated?
a gross monthly income divided by total monthly debt
b gross monthly income divided by net monthly income
c total monthly debt divided by gross monthly income
d net monthly income divided by gross monthly income

Explanation:

The debt - to - income ratio is a financial metric that measures the proportion of a person's monthly debt payments to their monthly income. By definition, it is calculated as total monthly debt divided by gross monthly income. Option A has the ratio reversed (income divided by debt), Option B is about the ratio of gross to net income (not related to debt), and Option D is about the ratio of net to gross income (also not related to debt). Only Option C follows the correct definition of the debt - to - income ratio.

Answer:

C. total monthly debt divided by gross monthly income