Question

advice from most financial advisers states to spend no more than 28% of ones gross monthly income for ones mortgage payment, and to spend no more than 36% of ones gross monthly income for ones total monthly debt.
suppose a family has a gross annual income of $39,600.
a. what is the maximum amount the family should spend each month on a mortgage payment?
b. what is the maximum amount the family should spend each month for total credit obligations?
try again.
use the amounts found above to calculate the maximum amount the family should spend for all other debt under the given conditions.

Explanation:

Step1: Calculate gross monthly income

$\text{Monthly Income} = \frac{\$39,600}{12} = \$3,300$

Step2: Find max monthly mortgage

$\text{Max Mortgage} = 0.28 \times \$3,300 = \$924$

Step3: Find max total monthly debt

$\text{Max Total Debt} = 0.36 \times \$3,300 = \$1,188$

Step4: Calculate other monthly debt

$\text{Other Debt} = \$1,188 - \$924 = \$264$

Answer:

a. $\$924$
b. $\$1,188$
c. $\$264$