Jim wants to buy a new motorcycle but he isn't sure he can afford it$.$ He salary is $$6,000$ per month, gross, which is great for someone who just graduated from college. His monthly paycheck withholdings are as follows:

$$1,200$ Federal Income Tax

$$200$ State Income Tax $$425$ Medicare & Social Security

Jim also has loans of:

$$600$ Student Loans

$$200$ Car Loan

PROBLEMII I

What is Jim's Disposable Income amount?

What is Jim's Debt Payments to Disposable Income Ratio?

Should Jim buy this motorcycle based on the Debt Payments to Disposable Income Ratio, and the percent recommendation below? Yes or No

The formula for Debt Payments to Disposable Income Ratio is:

Monthly non$-$mortgage debt payments$/$monthly disposable income $($not gross income$).$

Example: $$\frac{500}{\text{\$}}5,000=10\%$ NOTE: It is desirable that the funds available for debt repayment be $14$ percent or less to determine whether or not one should purchase something. In this example it would be okay since the ratio is $10\%.$