Answers Mathematics for Data and Financial Literacy PretestQuestion 4

4

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Question 4 • Mathematics for Data and Financial Literacy

Eden earns $⁢3,500 per month from her salary and $⁢500 from a part-time job. Her monthly debt payments include $⁢250 for a student loan and $⁢150 for a credit card. What is her debt-to-income ratio, written as a percent? Use the debt-to-income ratio formula: (total monthly debt payments)/(gross monthly income)⋅100

Answer

A

11 percent

B

14%

C

10%

D

8%

Explanation

Eden’s gross monthly income is $3,500 + $500 = $4,000, and her monthly debt payments total $250 + $150 = $400. Her debt-to-income ratio is ($400 ÷ $4,000) × 100 = 10 percent, so the correct choice is 10 percent.

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