Question

How much annual income would you need to have if, using the 28/36 ratio, your maximum allowable recurring debt is $380?

Answer 1

c

Explanation:

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Answer 2

$30.40

Explanation:

Recurring debt is am amount paid for the debt service. It involves all the payment which could not be canceled on the request. It includes Child Support, Loan Payment etc.

A household is required to spend 28% of the gross income as housing expenses, but not above 36% of total debt.

Housing expense = 28% x 380 = $106.4

Expense on Debt = 36% x 380 = $136.80

So,

Allowable recurring debt having income of $380 = 136.80 - 106.40 = $30.4