What would the DTI ratio be if someone’s monthly income is 5,000

Question

and monthly debt is 2,500?
50%
.5%
2%
65%

Answer 1

The Debt-to-Income (DTI) ratio is calculated by dividing the total monthly debt payments by the gross monthly income, then multiplying by 100 to get a percentage.

In this case:

• Monthly Income = $5,000
• Monthly Debt = $2,500

The DTI ratio is calculated as follows:

\[ \text{DTI} = \left( \frac{\text{Monthly Debt}}{\text{Monthly Income}} \right) \times 100 \]

\[ \text{DTI} = \left( \frac{2,500}{5,000} \right) \times 100 = 0.5 \times 100 = 50% \]

So the DTI ratio would be 50%.