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In this financial question, Hector and Maria Montez are trying to calculate their **debt ratio**. The debt ratio is typically calculated by dividing total liabilities (debts) by total assets. Let’s break down the values and perform the necessary calculations.

### Given values:
- **Liabilities (Debts):**
  - Credit card balance: $1,000
  - Car loan balance: $12,000
  - Total debt = $1,000 + $12,000 = **$13,000**

- **Assets:**
  - Savings account: $1,200
  - Checking account: $800
  - Car market value: $8,000
  - Furniture market value: $2,000
  - Stocks and bonds: $10,000
  - Total assets = $1,200 + $800 + $8,000 + $2,000 + $10,000 = **$22,000**

### Debt ratio calculation:
The formula for the debt ratio is:
\[
\text{Debt Ratio} = \frac{\text{Total Liabilities}}{\text{Total Assets}}
\]

Substituting the values:
\[
\text{Debt Ratio} = \frac{13,000}{22,000} \approx 0.59
\]

### Interpretation:
This means their debt ratio is approximately **0.59 times**, which represents the proportion of their debt relative to their total assets.

The correct answer is: **0.59 times**.

Would you like further clarification, or do you have any questions?

### Additional Questions:
1. How can the debt ratio affect future financial decisions?
2. What are other ways to measure financial health besides the debt ratio?
3. What happens if the debt ratio exceeds 1?
4. How can Hector and Maria reduce their debt ratio over time?
5. What is the significance of assets like stocks and bonds in calculating the debt ratio?

### Tip:
A debt ratio under 1 is usually considered healthy, as it indicates that assets outweigh liabilities.

Hector and Maria Montez are trying to figure out their financial health. They will pay off their car loan in three years, their gross household income is $3,800 per month, and they receive $75 per month in interest income from their investments. Savings account: $1,200, Checking account: $800, Credit card balance: $1,000, Car loan balance: $12,000, Car market value: $8,000, Furniture market value: $2,000, Stocks and bonds: $10,000. What is their debt ratio?

Learn how to calculate Hector and Maria's debt ratio by dividing their total liabilities ($13,000) by their total assets ($22,000). This real-world financial problem helps students understand debt ratio calculations and the impact of liabilities on financial health. Suitable for Grades 10-12.

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