Question

How much annual income would you need to have if, using the 28/36 ratio, your maximum allowable recurring debt is $380?
a.
$16,290
b.
$22,800
c.
$57,000
d.
$75,000

Answer 1

Use the 28% (front‑end) ratio: 0.28 × monthly income = $380.
Monthly income = 380 / 0.28 = $1,357.14. Annual income = $1,357.14 × 12 ≈ $16,285.7 ≈ $16,290.

Answer: a. $16,290