contestada

Sarah has​ $15,000 in monetary​ assets, $48,000 in annual living​ expenses, a​ $20,000 balance on her car​ loan, and​ $60,000 of equity in her house. What is her​ month's living expenses covered​ ratio

Respuesta :

sadddamkashmiri801

Answer:

3.75 times

Explanation:

The formula used to calculate the monthly living expenses covered ratio is as under:

Monthly living expenses covered ratio = Monetary Assets * 12 / Annual living expenses

Here money assets is worth $15000 and annual living expense is $48,000.

By putting the values we have:

Monthly living expenses covered ratio = $15000 * 12 / $48000 = 3.75 Times

jepessoa

Answer:

3.75

Explanation:

month's living expenses covered ratio = total liquid assets / total monthly cash expenses

  • total liquid assets = $15,000 (home equity is not liquid)
  • total monthly cash expenses = $48,000 / 12 = $4,000

month's living expenses covered ratio = $15,000 / $4,000 = 3.75