Chelsea Menken, of Providence, Rhode Island, recently graduated with a degree in food science and now works for a major consumer foods company earning $70,000 per year with about $56,400 in take-home pay. She rents an apartment for $1,200 per month. While in school, she accumulated about $37,000 in student loan debt on which she pays $385 per month. During her last fall semester in school, she had an internship in a city about 100 miles from her campus. She used her credit card for her extra expenses and has a current debt on the account of $9,000. She has been making the minimum payments on the account of about $240 a month. She has assets of $14,000.

1. Calculate Chelseas debt payments-to-disposable income ratio. Round your answer to two decimal places.

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2. Calculate Chelseas debt-to-income ratio. Round your answer to two decimal places.

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3. Comment on Chelseas debt situation and her use of student loans and credit cards while in college.

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