3. Amy and Paul are a young married couple with a cat, but no children. They are currently renting an apartment, but are considering buying a house. They have created the following budget based on the house they hope to purchase. a) List any expenses that you feel have been omitted. Revise the budget to include these expenses. If necessary, reduce discretionary expenses so that income still exceeds expenses. 14 Amy & Paul's Budget Combined Net Income $ 4,142.00 Expenses Mortgage $ 1,205.68 Property Tax $ 265.98 House Insurance |$ 36.42 Electricity $ 100.00 Natural Gas Heating $ 50.00 Food $ 600.00 TV/Phone/Internet $ 125.00 Clothing $ 200.00 Car Loan Payments $ 745.52 Car Insurance $ 212.63 Gasoline $ 75.00 Life Insurance $ 45.00 Travel Fund $ 200.00 Gifts $ 60.00 Total Expenses $ 3,921.23 Income - Expenses $ 220.77 b) The combined gross annual income of Amy and Paul is $64 800. Calculate both the Gross Service Debt and Total Service Debt ratios. According to these ratios, is this house affordable for Amy and Paul? /5