Problem
When you graduate from college, you apply for and are offered a job that pays $1900 per month. You have a student loan debt of $15,000 with a 3% interest rate.
• Part 1: What should your maximum rent be to keep your front-end ratio no higher than 28%?
• Part 2: If you decide to rent an apartment for the maximum amount in Part A, what should your maximum student loan payment be to maintain a 36% back-end DTI ratio?
• Part 3: How long will it take to pay off the loan at this rate?
• Part 4: If you want to pay off the loan in a more reasonable amount of time-let's say 60 months-what does the amount of the loan payment need to be?
• Part 5: If you increase the loan payment to the amount calculated in Part 4, what minimum income do you need to make sure that your back-end ratio is at 36? (Note: You signed a lease so your rent is still the amount calculated in Part A.) Round to the nearest whole number (dollar).