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Joey would like to apply for a loan but knows that his high debt-to-income (DTI) ratio will probably get in his way
He would like to lower his DTI ratio by lowering the amount of his gross monthly income that goes to living
expenses.
Joey's current monthly expenses include a rent payment of $1,100, a $178 car payment, and a combined minimum
payment of $220 for his credit card debt. His current gross monthly income is $3,600. If Joey moves to a new
apartment, what is the maximum monthly rent payment he can make and still maintain a DTI ratio of 36%?
a $702
b. $898
$922
d. $960
more
C

Respuesta :

Answer:

$898

Step-by-step explanation:

Parrain

Based on Joey's debt-to-income ratio, the maximum monthly rent payment he can make and still maintain the DTI ratio is b. $898.

Monthly debt maximum payment

Joey has a DTI ratio of 36% which means that his maximum debt payment should be 36% of his income. This amount would be:

= DTI x monthly income

= 36% x 3,600

= $1,296

Maximum monthly rent

This can be found as:

= Maximum monthly debt payment - Car payment - Credit card payment

= 1,296 - 178 - 220

= $898

In conclusion, option B is correct.

Find out more on DTI ratios at https://brainly.com/question/24814852.

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