Ask Question
9 July, 17:09

Mike and Teresa Garza have a monthly gross income of $5,000, but they pay $1,000 per month in taxes. They also pay $2,000 per month in various loan payments. What is their debt service ratio?

+4
Answers (1)
  1. 9 July, 17:50
    0
    40%

    Explanation:

    Debt service ratio is the rate at which an individual allocates a certain amount to reduce debt value till the debt is totally offset.

    In the above question, Mike and Theresa pay $2,000 to offset various loans (debts). To calculate the debt service ratio of the couple, the amount paid to service loans is expressed as a percentage of their total income.

    We have,

    $2,000 x 100%

    $5,000

    = 0.4 x 100%

    = 40%

    Therefore, the debt service ratio of Mike and Theresa is 40%.

    Cheers.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Mike and Teresa Garza have a monthly gross income of $5,000, but they pay $1,000 per month in taxes. They also pay $2,000 per month in ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers