Visual guide breaking down ideal debt-to-income ratios and providing a real-world calculation example based on average U.S. salary data.

Infographic showing how to calculate debt ratios with ideal percentages and a salary scenario example.

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Show Answer Key & Explanations Step-by-step solution for: How Much Can I Afford to Borrow? | USAA

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1. Identify the relevant data from the image for the total debt-to-income ratio calculation:
- Monthly Total Debt Payment: $1,700
- Gross Monthly Income: $4,855

2. Use the formula for total debt-to-income ratio:
- Total debt-to-income ratio = (Monthly Total Debt Payment / Gross Monthly Income) * 100

3. Substitute the values into the formula:
- Total debt-to-income ratio = ($1,700 / $4,855) * 100

4. Perform the calculation:
- Total debt-to-income ratio = 0.35015 * 100 = 35.015%

5. Round the result to the nearest whole number:
- Total debt-to-income ratio ≈ 35%

The total debt-to-income ratio is 35%.

Parent Tip: Review the logic above to help your child master the concept of debt to income ratio worksheet.

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