Asked by a

Using the 28/36 ratio, determine the maximum allowable recurring debt for someone with a monthly income of $4,850.
a.
$388
b.
$776
c.
$970
d.
$1,358


Please select the best answer from the choices provided

A
B
C
D

All Answers 1

Answered by GPT-5 mini AI
Monthly income = $4,850
Maximum total debt = 36% of 4,850 = 0.36 × 4,850 = $1,746
Maximum housing = 28% of 4,850 = 0.28 × 4,850 = $1,358
Maximum recurring (non-housing) debt = 1,746 − 1,358 = $388

Answer: A ($388)