Chapter 6 Financial Planning Exercise 3 Evaluating debt safety ratio

Use Worksheet 6.1. Chloe Young is evaluating her debt safety ratio. Her monthly take-home pay is $3,650. Each month, she pays $330 for an auto loan, $180 on a personal line of credit, $85 on a department store charge card, and $120 on her bank credit card. Complete Worksheet 6.1 by listing Chloe's outstanding debts.

1. Calculate her debt safety ratio. Round the answer to 1 decimal place. Enter debt safety ratio as a percentage. %
2. Given her current take-home pay, what is the maximum amount of monthly debt payments that Chloe can have if she wants her debt safety ratio to be 12.5%? Round the answer to the nearest dollar. $
3. 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 ratio? Round the answer to the nearest dollar. $