Christine just finished her first year of work following graduation, and she fee
ID: 2677899 • Letter: C
Question
Christine just finished her first year of work following graduation, and she feels it is time she assess her financial situation. Her annual gross income is $45,000, and her income after taxes is $35,800. She has the following liabilities. What is Christine's debt safety ratio, and what does it say about Christine's financial situation? (show work please)Auto loan:
Balance$ 6,000
Payment$ 265
Education loan:
Balance$10,000
Payment$ 250
Credit card debt:
Balance$ 1,200
Payment$ 58
Personal line of credit:
Balance$ 3,900
Payment$ 195
Home mortgage:
Balance$75,000
Payment$ 550
Explanation / Answer
Debt safety ratio = consumer credit payments / take-home pay =12*(265+250+58+195+550)/$35,800 =44.18% Your debt safety ratio should not exceed 20 percent and should preferably be around 15 percent. Christine's financial situation is weak