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

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**.