Ted Phillips has monthly take-home pay of $1,935; he makes payments of $430 a month on his outstanding consumer credit (excluding the mortgage on his home). How would you characterize Ted's debt burden?
$430/$1,935 = 0.22 or 22%
It is above or equal the maximum suggested limit.
What if his take-home pay were $825 a month and he had monthly credit payments of $150?
$150/$825 = 0.18 or 18%
It is lower than the maximum ratio, but higher than the manageable
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