Math Problem Statement

Rocky owns a $184,000 town house and still has an unpaid mortgage of $149,000. In addition to his mortgage, he has the following liabilities:

Visa $ 750 MasterCard 370 Discover card 550 Education loan 3,400 Personal bank loan 550 Auto loan 5,900 Total $ 11,520 Rocky’s net worth (not including his home) is about $38,000. This equity is in mutual funds, an automobile, a coin collection, furniture, and other personal property.

What is Rocky’s debt-to-equity ratio?

Note: Round your answer to 2 decimal places.

Has he reached the upper limit of debt obligations?

Solution

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Math Problem Analysis

Mathematical Concepts

Ratios
Financial Analysis
Debt-to-Equity Ratio

Formulas

Debt-to-Equity Ratio = Total Liabilities / Equity

Theorems

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Suitable Grade Level

Grades 9-12