SOLUTION: Sheila little has a gross monthly income of $3500. She has 15 remaining payments of $147 on a used car. The taxes and insurance on the house are $85 per month. What maximum monthly

Algebra.Com
Question 1173049: Sheila little has a gross monthly income of $3500. She has 15 remaining payments of $147 on a used car. The taxes and insurance on the house are $85 per month. What maximum monthly payment does the banks loan officer feel that Sheila can afford?
2416.16
980.00
938.84
838.25
Answer by CPhill(1959)   (Show Source): You can put this solution on YOUR website!
Here's how to solve this problem:
**1. Calculate Total Monthly Debt:**
* Car payment: $147
* Taxes and insurance: $85
* Total existing debt: $147 + $85 = $232
**2. Determine Maximum Allowable Debt:**
* A common guideline for a maximum debt-to-income ratio (DTI) is 36%.
* Maximum allowable debt: $3500 * 0.36 = $1260
**3. Calculate Maximum Monthly Payment:**
* Maximum monthly payment: $1260 - $232 = $1028
The provided answer choices do not contain the correct answer. The correct answer is 1028.00.
RELATED QUESTIONS

The Jackson’s gross monthly income is $6500. They have 13 remaining payments of $320 on (answered by CPhill)
Car payments. As a rule of thumb, debt payments (other than mortgages) should be less... (answered by nerdybill)
Car payment. As a rule of thumb,debt payments (other than mortgages) should be... (answered by rfer)
54.000/12=4500 8%=0.08 0.08*4500=360 360-100=260 How do I write this as an... (answered by Alan3354)
A single person pays $6,600 in income taxes on a gross income of $33,000. How much would (answered by rfer)
In Alabama the state income tax paid is directly proportional to the gross monthly... (answered by stanbon)
April took out a $10000 loan to buy a car. The loan has an interest rate of 2.1% for 4... (answered by math_tutor2020)
Sienna decides to buy a car. She has enough money saved up for the down payment on the... (answered by addingup)
1.Mrs. Hanna D. Solis, a private tutor has a basic salary of ₱19,800.00 per month. How... (answered by CPhill)