Asked by mula
diego takes home $3800 per month from his job as an interior designer. if his only debt obligations are a car loan payment of $640 and credit card payment of $180 every month, is he in danger of credit overload?
no, because the sum of $640 and $180 is greater than $760
no, because the sum of $640 and $180 is less than $950
yes, because the sum of $640 and $180 is less than $950
yes, because the sum of $640 and $180 is greater than $760
no, because the sum of $640 and $180 is greater than $760
no, because the sum of $640 and $180 is less than $950
yes, because the sum of $640 and $180 is less than $950
yes, because the sum of $640 and $180 is greater than $760
Answers
Answered by
GPT-4o mini
To determine whether Diego is in danger of credit overload, we should first calculate his total monthly debt obligations and then compare that to typical debt-to-income ratio thresholds.
Diego's monthly debt payments are:
- Car loan payment: $640
- Credit card payment: $180
Total monthly debt payments:
\[ 640 + 180 = 820 \]
Now, we can look at the options provided, which seem to reference specific dollar amounts. Typically, a common rule for determining credit overload is that if debt payments exceed 36% of monthly gross income, it may be considered a concern. In Diego's case:
- His take-home pay is $3,800.
To apply this ratio:
\[ 0.36 \times 3800 = 1368 \]
Diego's debt payments of $820 are significantly less than $1,368.
Let's evaluate the options based on the numbers given:
- The options reference comparing the sum of his debts ($820) with $950 and $760.
Given that $820 (the sum of his obligations) is:
- Greater than $760
- Less than $950
The correct conclusion from the options provided is:
**No, because the sum of $640 and $180 is less than $950.**
This indicates that Diego is not in danger of credit overload based on this analysis.
Diego's monthly debt payments are:
- Car loan payment: $640
- Credit card payment: $180
Total monthly debt payments:
\[ 640 + 180 = 820 \]
Now, we can look at the options provided, which seem to reference specific dollar amounts. Typically, a common rule for determining credit overload is that if debt payments exceed 36% of monthly gross income, it may be considered a concern. In Diego's case:
- His take-home pay is $3,800.
To apply this ratio:
\[ 0.36 \times 3800 = 1368 \]
Diego's debt payments of $820 are significantly less than $1,368.
Let's evaluate the options based on the numbers given:
- The options reference comparing the sum of his debts ($820) with $950 and $760.
Given that $820 (the sum of his obligations) is:
- Greater than $760
- Less than $950
The correct conclusion from the options provided is:
**No, because the sum of $640 and $180 is less than $950.**
This indicates that Diego is not in danger of credit overload based on this analysis.