Jon earns a gross income of $42,000 per year as a young engineer. his debt payments, including student loan and mortgage payments, are $1,200 per month. how much more can he take on in monthly debt payments and not go over the dangerous 40 percent ratio of debt payment to gross income?

He can take on $200 more debt per month before crossing the 40% ratio debt payment to gross income. Calculate by finding 40 percent of gross income (42,000 x 0.4 = 16,800/year) and current debt payment (1,200 * 12 = 14,400). Find the difference (16,800-14,400 = 2,400). Divide by 12 to get monthly possible increase (2,400 / 12 = 200).