Rudabeh, 34, and Donovan, 31, want to buy their first home. Their current combined net income is $61,000 and they have two auto loans totaling $34,000. They have saved approximately $14,000 for the purchase of their home and have total assets worth $50,000, which are mostly savings for retirement. Donovan has always been cautious about spending large amounts of money, but Rudabeh really likes the idea of owning their own home although she hasn't expressed her preference to Donovan. They do not have a budget, but they do keep track of their expenses, which amounted to $57,000 last year, including taxes. They pay off all credit card bills on a monthly basis and do not have any other debt or loans outstanding. Other than that, they do not spend a great deal of time tracking their finances.

1. Calculate their net worth and income surplus. How does their net worth compare to that of other individuals younger than 35?

a) Rudabeh and Donovan's net worth is $____.

b) Rudabeh and Donovan's surplus income is $____.

2. Calculate and interpret their month's living expenses covered ratio and their debt ratio.

a) Rudabeh and Donovan's months living expense covered ratio is ____. (round to two decimal places)

b) Rudabeh and Donovan's debt ratio is ____%. (enter as percent rounded to two decimal places)