Real Estate Math
A buyer's total housing expense (PITI) is $1,400/month. Their gross monthly income is $5,000. What is their front-end ratio?
A24%
B28%✓ Correct
C32%
D36%
Explanation
Front-end ratio = Monthly PITI ÷ Gross Monthly Income = $1,400 ÷ $5,000 = 0.28 = 28%. Using the values given ($1,400, $5,000), apply the appropriate formula.. The correct answer is 28%.. This is a common calculation on the Arkansas real estate exam.
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