Use Worksheet 6.1. Chloe Young is evaluating her debt safety ratio. Her monthly take home pay is $3,360. Each month, she pays $420 for an auto loan, $150 on a personal line of credit, $65 on a department store charge card, and $85 on her bank credit card. Complete Worksheet 6.1 by listing Chloe's outstanding debts. a. Calculate her debt safety ratio. Round the answer to 1 decimal place. Enter debt safety ratio as a percentage. b. Given her current take-home pay, what is the maximum amount of monthly debt payments that Chloe can have it she wants her debt safety ratio to be 12.5%? Round the answer to the nearest dollar. c. Given her current monthly debt payment load, what would Chloe's take-home pay have to be if she wanted a 12.5% debt safety ratlo? Round the answer to the nearest dollar. $ N6 X fx DE F H N A B Name Dated October 4, 2020 6 7 Current Monthly (or Min.) Payment Lender 8 9 Type of Loan Auto and Personal loans 1. $ 2. 3. 1. 2. Education loans 1. Overdraft Protection Line Personal line of credit Credit Cards 1. 2. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3. 4. 1. Home Equity Line TOTAL MONTHLY PAYMENTS S "Note: List only those loans that require regular monthly payments. Monthly Take-Home Pay 1. $ 2. 30 31 36 33 0.0% 35 TOTAL MONTHLY TAKE HOME PAY $ Debt Safety Ratio: Total monthly payments $ x 100 x 100 = Total monthly take-home pay $ Changes needed to reach a new debt safety ratio 1. New (Target) debt safety ratio: % 2. At current take-home pay of $ total monthly payments must equal: Total monthly take home pay Target debt safety ratio $ OR 37 39 43 0.000 = $ 45 New Monthly Payments 47 $ 49 3. With current monthly payments of totaltake home pay must equal Total monthly payments *100 New (target) debt safety ratio 51 52 53 0.000 *100 = 5 New take home pay ws 06.1 + 29 Wre Paste lil Mer N6 fx DE F H N 1. AB Overdraft Protection Line Personal line of credit Credit Cards 1. 2. 3. 4. 1. Home Equity Line 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30 31 TOTAL MONTHLY PAYMENTS $ *Note: List only those loans that require regular monthly payments. Monthly Take-Home Pay 1. $ 2. TOTAL MONTHLY TAKE HOMEPAY S Debt Safety Ratio: Total monthly payments $ x 100 x 100 = Total monthly take home pay $ . Changes needed to reach a new debt safety ratio 1. New (Target) debt safety ratio: 2. At current take home pay of $ total monthly payments must equal: Total monthly take home pay x Target debt safety ratio** $ 0.0% 33 35 % 37 39 41 43 0.000 = $ New Monthly Payments 45 OR 47 $ 49 3. With current monthly payments of total take home pay must equal: Total monthly payments x 100 New (target) debt safety ratio $ 51 52 53 *100 = $ 0.000 New take home pay **Note: Enter debt safety ratio as a decimal (8,15%0.15). 55 56 57 58 59 60 61 62 63 D WS_06.1 +
