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?
A)20%
B)30%
C)40%
D)50%
E)60%

Question

Quizplus · Accepted Answer

Debt Service Ratio = (Monthly Loan Payments / Gross Monthly Income) x 100%
Debt Service Ratio = (2000 / 5000) x 100%
Debt Service Ratio = 40% 
Therefore, the answer is C, 40%.

Mike and Teresa Garza Have a Monthly Gross Income of $5,000,but