Question

jared has a monthly gross income of $2,250 and a monthly debt load of $200. how can his debt - to - income ratio be classified?
excellent—10 percent or less
ideal—between 10 and 15 percent
good—between 15 and 20 percent
concerning—greater than 28 percent

Explanation:

Step1: Calculate the debt - to - income ratio

The formula for the debt - to - income ratio is \(\text{Debt - to - Income Ratio}=\frac{\text{Monthly Debt}}{\text{Monthly Gross Income}}\times100\%\)
Given that the monthly debt is \(D = 200\) and the monthly gross income is \(I=2250\)

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Answer:

Jared's debt - to - income ratio is approximately \(8.89\%\), so it can be classified as "Excellent—10 percent or less"