12. Ted has an adjusted gross income of $120,006. He wants a house with a monthly mortgage payment of $1,921 and annual property taxes of $7,112. His semiannual homeowner's premium would be $897. Ted has a credit card bill that averages $300 per month. a. What is the back-end ratio to the nearest percent? the front-end ratio? b. Assume that his credit rating is good. Based on the back-end ratio, wouid the bank offer him a loan? Explain. c. Based on the front-end ratio, would the bank offer him a loan? Explain.

12. Ted has an adjusted gross income of $120,006. He wants a house with a monthly mortgage payment of $1,921 and annual property taxes of $7,112. His semiannual homeowner's premium would be $897. Ted has a credit card bill that averages $300 per month. a. What is the back-end ratio to the nearest percent? the front-end ratio? b. Assume that his credit rating is good. Based on the back-end ratio, wouid the bank offer him a loan? Explain. c. Based on the front-end ratio, would the bank offer him a loan? Explain.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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