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4.4 Assignment: Paying off Credit Card Debt This assignment is an extension of the class activity for this section. Araceli gets right to paying off those credit cards by paying as much as she can every month. Because she is disciplined, the cards are paid off much sooner than if she had made only the minimum payment 1. Araceli earns $60,000 per year. Now that she has paid off her credit card debt, she is ready to buy a house. Araceli has a $200 car payment, no student loans $300 in car insurance every 6 months and she estimates that her monthly utility bills will be $150 in a house. If her bank requires no more than a 36% debt to income ratio, what would her maximum monthly mortgage payment be? Is this enough to borrow $150,000 at 3.6% for 30 years? Explain your reasoning. (Use the monthly payment formula.) Is it enough to borrow the money at the current 30-year fixed mortgage rate? (Look up the rate and calculate the payment.) 2. In light of what you have learned today, how do you plan to use your credit effectively so that you have a 'good' credit score when you want to make a major purchase (such as a house or a car)? Araceli gets right to paying off those credit cards by paying as much as she can every month. 4.4 Assignment: Paying off Credit Card Debt This assignment is an extension of the class activity for this section Because she is disciplined, the cards are paid off much sooner than if she had made on the minimum payment 1. Araceli carns $60,000 per year. Now that she has paid off her credit card debe, she is ready to buy a house. Araceli has a $200 car payment, no student loans, $300 in car insurance every 6 months and she estimates that her monthly utility bills will be S1s0 in a house. If her bank requires no more than a 36% debt to income ratio, what would her maximum monthly mortgage payment be? Is this enough to borrow $150,000 at 3.6% for 30 years? Explain your reasoning. (Use the monthly payment formula.) Is it enough to borrow the money at the current 30-year fixed mortgage rate? (Look up the rate and calculate the payment.) 2. In light of what you have learned today, how do you plan to use your credit effectively so that you have a 'good' credit score when you want to make a major purchase (such as a house or a car)