Ralph is thinking of switching jobs. He want to make sure that his new salary maintains a debt-to-income (DTI) ratio of at most 36%. His DTI ratio is currently 29% with a gross monthly income of $3,700. What minimum gross monthly income will Ralph need to maintain a DTI ratio of 36%?

a.

$1,073.00

b.

$1,332.00

c.

$2,980.56

d.

$3,862.80

Question

Mathematics

Justine Bush

3 October, 18:37

Ralph is thinking of switching jobs. He want to make sure that his new salary maintains a debt-to-income (DTI) ratio of at most 36%. His DTI ratio is currently 29% with a gross monthly income of $3,700. What minimum gross monthly income will Ralph need to maintain a DTI ratio of 36%?

a.

$1,073.00

b.

$1,332.00

c.

$2,980.56

d.

$3,862.80

+5

Answers (1)

Know the Answer?

Archie · Answer 1

First, solve for Ralph's debt by using his current gross income and DTI ratio.

0.29 = D/3,700

D = 1,073

Then, solve for the current gross income given that new DTI ratio is 36%.

0.36 = 1,073 / gross income

The value of gross income should be $2,980.56. Thus, the answer is letter C.