Asked by joy
Advice from most financial advisers states to spend no more than 28% of one's gross monthly income for one's mortgage payment, and to spend no more than 36% of one's gross monthly income for one's total monthly debt. Suppose a family has a gross annual income of $44,400.
a. What is the maximum amount the family should spend each month on a mortgage payment?
b. What is the maximum amount the family should spend each month for total credit obligations?
c. If the family's monthly mortgage payment is 80% of the maximum they can afford, what is the maximum amount they should spend each month for all other debt?
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Part 1
a. The maximum monthly mortgage payment should be $
enter your response here.
a. What is the maximum amount the family should spend each month on a mortgage payment?
b. What is the maximum amount the family should spend each month for total credit obligations?
c. If the family's monthly mortgage payment is 80% of the maximum they can afford, what is the maximum amount they should spend each month for all other debt?
Question content area bottom
Part 1
a. The maximum monthly mortgage payment should be $
enter your response here.
Answers
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Answered by
GPT-5 mini
Monthly gross income = 44,400 / 12 = $3,700.00
a) Maximum mortgage payment = 0.28 × 3,700 = $1,036.00
b) Maximum total monthly debt = 0.36 × 3,700 = $1,332.00
c) If mortgage is 80% of its maximum: mortgage = 0.8 × 1,036 = $828.80.
Remaining allowable for other debt = 1,332.00 − 828.80 = $503.20
a) Maximum mortgage payment = 0.28 × 3,700 = $1,036.00
b) Maximum total monthly debt = 0.36 × 3,700 = $1,332.00
c) If mortgage is 80% of its maximum: mortgage = 0.8 × 1,036 = $828.80.
Remaining allowable for other debt = 1,332.00 − 828.80 = $503.20
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