Answer :
To determine the maximum amount Zeke can spend on loan and credit card payments without being in danger of credit overload, we generally follow a guideline often used for financial safety. A common rule is that no more than 20% of monthly take-home pay should be used for credit repayments.
Here's how you can calculate it:
1. Identify Zeke's Monthly Take-Home Income:
- Zeke takes home [tex]$3,700 each month.
2. Determine the Percentage Allowable for Credit Payments:
- Typically, it's safe to allocate up to 20% of your monthly income for loan and credit card payments.
3. Calculate the Maximum Amount for Loan and Credit Card Payments:
- Multiply Zeke's monthly income by the allowable percentage:
\[
\text{Maximum Spending} = 3,700 \times 0.20
\]
4. Perform the Calculation:
- This results in:
\[
\text{Maximum Spending} = 740
\]
Therefore, the maximum amount Zeke can spend each month on loan and credit card payments without being in danger of credit overload is $[/tex]740. Thus, the correct answer is:
A. $740
Here's how you can calculate it:
1. Identify Zeke's Monthly Take-Home Income:
- Zeke takes home [tex]$3,700 each month.
2. Determine the Percentage Allowable for Credit Payments:
- Typically, it's safe to allocate up to 20% of your monthly income for loan and credit card payments.
3. Calculate the Maximum Amount for Loan and Credit Card Payments:
- Multiply Zeke's monthly income by the allowable percentage:
\[
\text{Maximum Spending} = 3,700 \times 0.20
\]
4. Perform the Calculation:
- This results in:
\[
\text{Maximum Spending} = 740
\]
Therefore, the maximum amount Zeke can spend each month on loan and credit card payments without being in danger of credit overload is $[/tex]740. Thus, the correct answer is:
A. $740
