1. If your net monthly income is $1,500, what should be the máximum amount you should spend on credit payments?

$1,500 x .20 = $300

2. Affan Chawdry has monthly net income of $1,050. He has a house payment of $450 per month, a personal loan
with payments of $250 per month, a Visa card with payments of $50 per month, and a credit card with a local
department store with payments of $100 per month. What is Affan's debt payments-to-income ratio? 
A. 2.63
B. 1.24
C. 0.81
D. 0.38
Ratio = ($250 + 50 + 100)/$1,050 = 0.38
3. Karen Price has determined that her net worth is $30,000, excluding her home. She owes $80,000 on her mortgage
and $15,000 on a personal loan. What is Karen's debt-to-equity ratio? 
A. 3.2
B. 2.0
C. 0.5
D. 2.7
$15,000/$30,000 = 0.5
4. Amanda has a house that has a market value of $5’380,000. The balance of her mortgage is $2’120,000. Assuming
she can only obtain a credit for 85% of the market value of her house, how much can she get as a loan?
(5380000*.85) – 2120000 = $2453000
5. You have a Bancomer Clasica credit card, and your debt is $28,000. The annual percentage rate of the credit card
is 28.12%. This card has a 10% mínimum payment. Calculate the time it will take to liquidate the debt if you are
only pay the mínimum every month, and how much will you end up paying, including the interest.
$ 28,000

- [
log 1−
( $ 2,800
)
0.023433
log ( 1+0.023433 )
]=11.52734551
months to pay back ≈12 months

( 11.52734551 ) × ( 2800 ) = $32,276.57 => $4,276.57 in interest.

6. Jerrod Dean starts the month with a balance on his credit card of $1,000. On the 10th day of the month, he
purchases $200 in clothes with his credit card. On the 15th day of the month he makes a payment on his credit card
of $500. The bank charges 1.5 percent interest per month using the adjusted balance method. What would Jerrod's
finance charges be for the month? 
A. $7.50
B. $13.25
C. $11.25
D. $15.00
E. $18.00
Interest = .015 x ($1,000 - $500) = $7.50
7.  Jerry Allison starts the month with a balance on his credit card of $1,000. On the 10th day of the month, he
purchases $200 in clothes with his credit card. On the 15th day of the month he makes a payment on his credit card
of $500. The bank charges 1.5 percent interest per month using the previous balance method. What would Jerry's
finance charges be for the month? 
A. $7.50
B. $13.25
C. $11.25
D. $15.00
E. $18.00
Interest = $1,000 x .015 = $15.00
8.  Henry Garrison starts the month with a balance on his credit card of $1,000. The average daily balance for the
month including purchase is $883. The average daily balance for the month excluding new purchase is $750. The
bank charges 1.5 percent per month and uses the average daily balance including new purchases method. What
would Henry's finance charges be for the month? 
A. $7.50
B. $13.25
C. $11.25
D. $15.00
E. $18.00
Interest = $883 x .015 = $13.25
9.  Randy Ice starts the month with a balance on his credit card of $1000. On the 10th day of the month, he purchases
$200 in clothes with his credit card. On the 15th day of the month he makes a payment on his credit card of $500.
The average daily balance for the month including the new purchase is $883. The average daily balance for the
month excluding the new purchase is $750. The bank charges 1.5 percent per month and uses the average daily
balance excluding new purchases method. What would Randy's finance charges be for the month? 
A. $7.50
B. $13.25
C. $11.25
D. $15.00
E. $18.00
Interest = $750 x .015 = $11.25
1. Ramon starts the month with a balance on his credit card of $1,800. On the 10th day of the month, he purchases
$1,230 in clothes with his credit card. On the 15th day of the month he makes a payment on his credit card of
$510. The average daily balance for the month including the new purchase is $883. The average daily balance for
the month excluding the new purchase is $750. The bank charges 51.35 percent per year and uses the previous
balance/adjusted balance/average daily balance including new purchases/average daily balance excluding new
purchases method.
a. What would Ramon's finance charges be for the month using each one of the 4 finance charges methods?
AB: (1800-510)*(.5135/12)=$55.20
PB: (1800)*(.5135/12)=$77.025
ADBINP: (883)*(.5135/12)=$37.79
ADBENP: (750)*(.5135/12)=$32.09
b. How much time would it take for Ramon to liquidate his credit card debt if he just pays the minimum
every month (10%)?
$ 1800

- [
log 1−
( $ 180
)
0.5135/12
log ( 1+0.5135/12 )
] =13.32820512
months to pay back ≈14 months

c. How much would he end up paying if he did it this way?

( 13.32820512 ) × ( 180 )= $2,399.08 => $599.08 in interest.