Question

Ralph is thinking of switching jobs. He want to make sure that his new salary maintains a debt-to-income (DTI) ratio of at most 36%. His DTI ratio is currently 29% with a gross monthly income of $3,700. What minimum gross monthly income will Ralph need to maintain a DTI ratio of 36%?
a.
$1,073.00
b.
$1,332.00
c.
$2,980.56
d.
$3,862.80

Answer 1

First find Ralph’s monthly debt: 0.29 × $3,700 = $1,073.

To keep DTI ≤ 36% we need new income ≥ debt / 0.36:
$1,073 ÷ 0.36 = $2,980.555... ≈ $2,980.56.

Answer: c. $2,980.56