Using a Front-End Ratio of 28 Percent,one Would Need an Annual

question 80

Multiple Choice

Using a front-end ratio of 28 percent,one would need an annual gross income of at least ____ to buy a home with total monthly payments of $1,245.

• A)$43,057
• B)$53,357
• C)$62,250
• D)$63,115

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Definitions:

Risk-Averse

A descriptive term for an individual or entity that prefers to avoid risk and chooses certainty over uncertainty when making investment or financial decisions.

Insurance Premium

The amount of money that individuals or businesses must pay for an insurance policy, providing coverage against specific risks.

Expected Claims

An estimation of the amount and frequency of claims a company might expect within a certain period, often used in insurance and risk management.

Marginal Utility

is the additional satisfaction or utility a consumer receives from consuming an additional unit of a good or service.