Mary is your friend who has not taken any financial planning course. Recently she told you that she has a large amount of outstanding credit payments and she does not know what to do.

Required:

1. Advise Mary FOUR signs that indicate she may have credit problems. (8 marks)

2. Marys monthly income and payment pattern for February are as follows:

   Total Income	$45,000
   Tax	$7,200
   Mortgage	$12,000
   Credit card	$9,100
   Total expense	$31,770

   1. (a) Calculate Marys savings ratio for the month of February. Keep your answers as percentage (%) with two decimal places (4 marks)

   2. (b) Calculate Marys debt safety ratio for February and comment on her debt burden. (6 marks)

   3. (c) If Mary wants to reduce her debt safety ratio, what can she do? (4 marks)

3. Suppose Mary got a revolving loan of $10,000 from the HSBC bank last week. She then used this loan to repay her credit card debt for February in full. This week, she repaid $2,500 to HSBC, what would be the balance of her revolving loan account? (4 marks)