Kevin Jones, of Elon, North Carolina, is single and recently graduated from law school. He is employed and earns $9,000 per month, an awesome salary for someone only 26 years old. He also has $1,600 withheld for federal income tax, $520 for state income taxes, $690 for Medicare and Social Security taxes, and $220 for health insurance every month. Kevin has outstanding student loans of almost $80,000 on which he pays about $950 per month and a 0% loan on an auto loan payment of $300 on a Ford Fusion Hybrid he purchased new during law school. He is considering taking out a loan to buy a Kawasaki motorcycle.
Required:
a. What is kevins debt payments to disposable income ratio?
b. Based on your answer to part (a), how would you advise kevin about his plan.
Answers: 1
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Kevin Jones, of Elon, North Carolina, is single and recently graduated from law school. He is employ...
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