jim has an annual salary of $96,000. his monthly expenses include a $2,500 mortgage payment, a $250 lease…

jim has an annual salary of $96,000. his monthly expenses include a $2,500 mortgage payment, a $250 lease payment, $500 in minimum credit card payments, and a $425 payment on his speed boat. he also receives $1,200 in interest from his savings and other accounts each month. calculate jim’s dti (debt - to - income) ratio. \n a. 30%\n b. 35%\n c. 40%\n d. 45%\n please select the best answer from the choices provided

jim has an annual salary of $96,000. his monthly expenses include a $2,500 mortgage payment, a $250 lease payment, $500 in minimum credit card payments, and a $425 payment on his speed boat. he also receives $1,200 in interest from his savings and other accounts each month. calculate jim’s dti (debt - to - income) ratio. \n a. 30%\n b. 35%\n c. 40%\n d. 45%\n please select the best answer from the choices provided

Answer

Explanation:

Step1: Calculate monthly income

Annual salary is $96,000, so monthly income is $\frac{96000}{12} = 8000$.

Step2: Calculate total monthly debt

Debts: mortgage ($2500$) + lease ($250$) + credit card ($500$) + boat ($425$) = $2500 + 250 + 500 + 425 = 3675$.

Step3: Calculate DTI ratio

DTI ratio is $\frac{\text{Total Debt}}{\text{Monthly Income}} \times 100% = \frac{3675}{8000} \times 100% \approx 45.94%$. Wait, maybe I misread the lease? Wait, the problem says "a $250 lease payment"? Wait, no, let's recheck. Wait, the original problem: "His monthly expenses include a $2,500 mortgage payment, a $250 lease payment, $500 in minimum credit card payments, and a $425 payment on his speed boat." So total debt: 2500 + 250 + 500 + 425 = 3675. Monthly income: 96000 / 12 = 8000. Then DTI is (3675 / 8000)*100 = 45.9375%, which is approximately 45%, so option d. Wait, maybe I made a mistake? Wait, no, let's check again. Wait, the interest is $1200, but that's income, not debt. So debt is only the payments: mortgage, lease, credit card, boat. So total debt: 2500 + 250 + 500 + 425 = 3675. Monthly income: 8000. 3675 / 8000 = 0.459375, so 45.9375%, which is about 45%, so option d.

Answer:

d. 45%