Answered

Expand your knowledge base with the help of IDNLearn.com's extensive answer archive. Join our platform to receive prompt and accurate responses from experienced professionals in various fields.

You have a $5,000 limit on your credit card. What is
the largest balance you should carry on this card to
maintain an acceptable debt ratio? Recall that your
debt ratio should never exceed 43% of your limit.
Be sure to show your work.
Answer in complete sentences.

Sagot :

GinnyAnsweridn
To determine the largest balance you should carry on your credit card while maintaining an acceptable debt ratio, we need to use the given credit limit and the specified acceptable debt ratio.

First, we identify the credit card limit, which is [tex]$5,000. Next, we note that the acceptable debt ratio is 43%. The debt ratio tells us the percentage of the total credit limit that should not be exceeded. Therefore, to find the largest balance you can carry, we calculate 43% of the $[/tex]5,000 credit limit.

To perform this calculation, we multiply the credit limit by the debt ratio:

[tex]\[ 5000 \times 0.43 = 2150 \][/tex]

Thus, the largest balance you should carry on your credit card, to maintain an acceptable debt ratio of 43%, is $2,150.

This ensures that your credit usage remains within the recommended limits, which can positively impact your credit score and financial health.
Your engagement is important to us. Keep sharing your knowledge and experiences. Let's create a learning environment that is both enjoyable and beneficial. Your search for answers ends at IDNLearn.com. Thanks for visiting, and we look forward to helping you again soon.