Angelica (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 $40,000 a year, or $3,333 a month. After taxes, health insurance, and other paycheck deductions, her net pay is $32,800 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 $342 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?

Question 5 options:

1)	$0; Angelica cannot currently afford a car loan.

2)	$108 monthly car loan payment.

3)	$425 monthly car loan payment.

4)	$855 monthly car loan payment.

Please help!