Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

3C ) Shelly (23 years old) studied dance in college and graduated a year ago. She currently works as a dance instructor at a high

3C) Shelly (23 years old) studied dance in college and graduated a year ago. She currently works as a dance instructor at a high school for the arts. Her gross pay is $46000 a year, or $3,833.33 a month. After taxes, health insurance, and other paycheck deductions, her net pay is $43,900 a year. The transmission on her old car just broke, and it will cost several thousand dollars to repair. She decides that it is time to purchase a new car. She does not have sufficient savings to buy a car outright, so she is planning on getting a car loan to make the purchase. She has monthly student loan payments of $480 and monthly rent of $750. Jill would like to keep her total debt-to-income ratio equal to or below the recommended level. What is the maximum amount her monthly car loan payment can be so that her total debt-to-income ratio is equal to or below the recommended limit?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Managerial Finance

Authors: Lawrence J Gitman, Chad J Zutter

7th Edition

0133546403, 9780133546408

More Books

Students also viewed these Finance questions