Question

Using the 28/36 ratio, determine the maximum allowable recurring debt for someone with a monthly income of $3,200.
a.
$256
b.
$512
c.
$640
d.
$896


Please select the best answer from the choices provided

A
B
C
D

Answer 1

A

Using the 28/36 rule, allowable non-housing recurring debt = (36% − 28%) × $3,200 = 8% × $3,200 = $256.