10. Louise McIntyre’s monthly gross income is $2,000. Her employer withholds $400 in federal, state, and local...

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10.
Louise McIntyre’s monthly gross income is $2,000. Her employerwithholds $400 in federal, state, and local income taxes and $160in Social Security taxes per month. Louise contributes $80 eachmonth for her IRA. Her monthly credit payments for VISA andMasterCard are $35 and $30, respectively. Her monthly payment on anautomobile loan is $285.

a.
What is Louise's debt payments-to-income ratio? (Enteryour answer as a percent rounded to 2 decimal places.)

  Debt payments-to-income ratio %

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While calculating debt to income ratio, debt includes all the monthly recurring debt payments and the same is divided by gross income before tax. Therefore debt to payment ratio =

Louise's Income

Louise's gross income - $2,000

+ federal, state and local tax - $400

+ Social security tax - $160

+ contribution to IRA - $80

Gross monthly Income = $2.640

Louise's Debt payments

Visa Credit Payment: $35

Master card Credit payment: $30

Automobile loan payment ; $285

Total monthly debt payment = $350

Debt payment to income ratio = Monthly debt payment / gross pre-tax income

= $350 / $2,640 * 100

= 13.25 %

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10.Louise McIntyre’s monthly gross income is $2,000. Her employerwithholds $400 in federal, state, and local income taxes and $160in Social Security taxes per month. Louise contributes $80 eachmonth for her IRA. Her monthly credit payments for VISA andMasterCard are $35 and $30, respectively. Her monthly payment on anautomobile loan is $285. a.What is Louise's debt payments-to-income ratio? (Enteryour answer as a percent rounded to 2 decimal places.) Debt payments-to-income ratio%