Question

You pay off the $800.00 credit limit card from problem #3. What happens to your debt ratio?
(1 point)
Responses

decreases by 10%
decreases by 10%

increases by 10 %
increases by 10 %

decreases by 4%
decreases by 4%

increases by 4%
increases by 4%

Answer 1

I don't have the details of problem #3, so I can't compute it exactly. Tell me the original total used to compute the debt ratio (total debt or total available credit, depending on how your class defines "debt ratio"), or paste problem #3 and I'll calculate.

Quick guide:
- Change in debt ratio = (800 ÷ original total) × 100 (negative because you paid it off).
- Example: if the original total was $8,000 → 800/8,000 = 0.10 → decreases by 10%.
- If the original total was $20,000 → 800/20,000 = 0.04 → decreases by 4%.