Question
Alex’s monthly take home pay is $2,500. What is the maximum bad debt payment he can maintain without being in credit overload?
(1 point)
Responses
$250
$250
$325
$325
$475
$475
$500
(1 point)
Responses
$250
$250
$325
$325
$475
$475
$500
Answers
GPT-4o mini
To determine the maximum bad debt payment Alex can maintain without being in credit overload, we typically refer to the guideline that suggests that no more than 20% of one's take-home pay should go towards debt payments.
In Alex's case, with a monthly take-home pay of $2,500:
\[ 20\% \text{ of } 2,500 = 0.20 \times 2,500 = 500 \]
Therefore, the maximum bad debt payment Alex can maintain without being in credit overload is **$500**.
In Alex's case, with a monthly take-home pay of $2,500:
\[ 20\% \text{ of } 2,500 = 0.20 \times 2,500 = 500 \]
Therefore, the maximum bad debt payment Alex can maintain without being in credit overload is **$500**.