Solution:
Debt Ratio= (Total liabilities which includes debts, and other expenses) ÷ (Total amount of worth possessed)
A debt ratio of approximately 0.5 is considered to be reasonable.
Money Owed by you = $ 3450.00
[tex]0.5=\frac{3450}{\text{Credit limit}}\\\\ {\text{Credit limit}}= 3450 \times \frac{10}{5}\\\\ {\text{Credit limit}}= 6900[/tex]$
So, the Credit limit which gives Acceptable Debt of $ 3450.00 when debt ratio is approximately more or less than 0.5 is
Out of the following four options
Option (D) $ 7,000 is true, regarding Credit limit.
