Calculating debt safety ratio. Use Worksheet 7.1. Every six months, Larry Sun takes an inventory of the consumer debts that he has outstanding. His latest tally shows that he still owes 4,000 on a...

Calculating debt safety ratio. Use Worksheet 7.1. Every six months, Larry Sun takes an inventory of the consumer debts that he has outstanding. His latest tally shows that he still owes
4,000 on a home improvement loan (monthly payments of
125); he is making
85 monthly payments on a personal loan with a remaining balance of
750; he has a
2,000, secured, singlepayment loan that’s due late next year; he has a
70,000 home mortgage on which he’s making
750 monthly payments; he still owes
8,600 on a new car loan (monthly payments of
375); and he has a
960 balance on his MasterCard (minimum payment of
40), a
70 balance on his Exxon credit card (balance due in 30 days), and a
1,200 balance on a personal line of credit (60 monthly payments). Use Worksheet 7.1 to prepare an inventory of Larry’s consumer debt. Find his debt safety ratio given that his take-home pay is
2,500 per month. Would you consider this ratio to be good or bad? Explain.