Robert Smith Has Monthly Net Income of $1,050

question 123

Multiple Choice

Robert Smith has monthly net income of $1,050.He has a house payment of $450 per month,a car loan with payments of $250 per month,a Visa card with payments of $50 per month,and a credit card with a local department store with payments of $100 per month.What is Robert's debt payments-to-income ratio?

• A)2.63
• B)1.24
• C)0.81
• D)0.38
• E)0.50

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Definitions:

Rent

A regular payment made for the use of land, property, or equipment.

Opportunity Cost

The skipping of feasible improvements from various alternatives due to settling on one.

Own Savings

The portion of personal or household income that is not spent on consumption but is kept aside for future use, investments, or emergencies.

Economic Profit

The variance identified between overall proceeds and all-inclusive financial outgoings, inclusive of both explicit and veiled costs.