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Question 15.15. (TCO 2) One of the characteristics of a certificate of
deposit is that it can have
high interest-rate risk.
low safety for savers.
limited liquidity.
a variable rate of return.
no minimum deposit amount.
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BUSN 380 Week 3 Problem Set 3

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1. Louise McIntyre’s monthly gross income is $2,000. Her employer
withholds $400 in federal, state, and local income taxes and $160 in
Social Security taxes per month. Louise contributes $80 per month for
her IRA. Her monthly credit payments for VISA, MasterCard, and
Discover card are $35, $30, and $20, respectively. Her monthly
payment on an automobile loan is $285. What is Louise’s debt
payments-to-income ratio? Is Louise living within her means?
2. Calculating Debt Payments–to-Income Ratio. Suppose that your
monthly net income is $2,400. Your monthly debt payments include
your student loan payment, a gas credit card and they total $360.