QuestionMay 31, 2025

Elysha has a monthly gross income of 3,000 and a monthly debt load of 500 How can her debt-to-income ratio be classified? Excellent -10 percent or less Ideal-between 10 and 15 percent Good-between 15 and 20 percent Concerning-greater than 28 percent

Elysha has a monthly gross income of 3,000 and a monthly debt load of 500 How can her debt-to-income ratio be classified? Excellent -10 percent or less Ideal-between 10 and 15 percent Good-between 15 and 20 percent Concerning-greater than 28 percent
Elysha has a monthly gross income of 3,000 and a monthly debt load of 500 How can her debt-to-income ratio be classified?
Excellent -10 percent or less
Ideal-between 10 and 15 percent
Good-between 15 and 20 percent
Concerning-greater than 28 percent

Solution
4.5(198 votes)

Answer

Good-between 15 and 20 percent Explanation 1. Calculate Debt-to-Income Ratio Use the formula: **Debt-to-Income Ratio = \(\frac{\text{Monthly Debt}}{\text{Monthly Gross Income}}\) \times 100**. Substitute the values: \(\frac{500}{3000} \times 100\). 2. Simplify the Calculation Calculate: \(\frac{500}{3000} = 0.1667\). Multiply by 100 to get ( ( \(16.67\%\) ) ).

Explanation

1. Calculate Debt-to-Income Ratio<br /> Use the formula: **Debt-to-Income Ratio = \(\frac{\text{Monthly Debt}}{\text{Monthly Gross Income}}\) \times 100**. Substitute the values: \(\frac{500}{3000} \times 100\).<br />2. Simplify the Calculation<br /> Calculate: \(\frac{500}{3000} = 0.1667\). Multiply by 100 to get ( \(16.67\%\) ).
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