Suppose a family has a gross annual income of $39,600.
a. what is the maximum amount the family should spend each month on a mortgage payment?
b. what is the maximum amount the family should spend each month for total credit obligations?
c. if the family's monthly mortgage payment is 70% of the maximum they can afford, what is the maximum amount they should spend each month for all other debt?

gross annual income: 39,600

gross monthly income: 39,600 / 12 = 3,300

a) maximum amount for monthly mortgage payment: 3,300 x 28% = 924

b) maximum amount for total credit obligations: 3,300 x 36% = 1,188

c) mortgage: 924 x 70% = 646.80 actual mortgage

1,188 - 646.80 = 541.20 maximum amount they could spend each month for all other debts.

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