Answer:
debt-to-income ratio= 0.7125
Step-by-step explanation:
Giving the following information:
Monthly expenses= $2,850
Monthly income= $4,000
To calculate the debt-to-income ratio, we need to use the following formula:
debt-to-income ratio= monthly debt payment / gross monthly income
debt-to-income ratio= 2,850/4,000
debt-to-income ratio= 0.7125
As a percentage:
debt-to-income= 0.7125*100
debt-to-income= 71.25%
The debt-to-income ratio is the percentage of your income dedicated to paying your debts.
