To determine Trudy's Debt-to-Income (DTI) ratio, we need to follow these steps:
1. Calculate Total Monthly Expenses:
Trudy's monthly expenses consist of the following:
- Rent: \[tex]$695
- Car Payment: \$[/tex]265
- Student Loan: \[tex]$200
- Credit Cards: \$[/tex]160
To find the total monthly expenses, we add these amounts together:
[tex]\[
\text{Total Monthly Expenses} = 695 + 265 + 200 + 160 = \$1320
\][/tex]
2. Calculate Total Annual Expenses:
Since we have the total monthly expenses (\[tex]$1320), we need to find out the total annual expenses by multiplying the monthly expenses by 12 (the number of months in a year):
\[
\text{Total Annual Expenses} = 1320 \times 12 = \$[/tex]15840
\]
3. Calculate the Debt-to-Income (DTI) Ratio:
The DTI ratio is calculated by dividing the total annual expenses by the annual income, and then multiplying by 100 to convert it to a percentage:
[tex]\[
\text{DTI Ratio} = \left(\frac{\text{Total Annual Expenses}}{\text{Annual Income}}\right) \times 100
\][/tex]
Plugging in the values, we get:
[tex]\[
\text{DTI Ratio} = \left(\frac{15840}{36000}\right) \times 100 = 44.0\%
\][/tex]
4. Select the Best Answer:
The available options for DTI ratio are:
- a. 28%
- b. 35%
- c. 37%
- d. 44%
The calculation shows that Trudy's DTI ratio is 44.0%. Therefore, the best answer from the choices provided is:
[tex]\[
\boxed{d. \ 44\%}
\][/tex]
