Jim has an annual salary of $96,000. his monthly expenses include a $2,500 mortgage payment, a $250 lease payment, $500 in minimum credit card payments, and a $425 payment on his speed boat. he also receives $1,200 in interest from his savings and other accounts each month. calculate jim’s dti (debt-to-income) ratio. a. 30% b. 35% c. 40% d. 45%

c. 40%      

Step-by-step explanation:

Since Debt to income ratio is the ratio between total expenses to total income. To find DTI ratio, we simply take our total debt figure and divide it by our total income.

We have been given that Jim has an annual salary of $96,000. He also receives $1,200 in interest from his savings and other accounts each month. So earnings from interest in one year will be: .

Let us find Jim's total monthly expenses by adding his monthly mortgage payment, lease payment, credit card payments and payment on his speed boat.

To find Jim's annual expenses we will multiply his monthly expenses by 12.

Let us divide $44,100 by $110,400 to find our debt to income ratio.

Let us convert our answer in percentage by multiplying 0.3994565 by 100.

Therefore, Jim's debt to income ratio is 40% and option c is the correct choice.

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