20/10 Rules Practice Problems

Using the 20/10 Rule for calculating responsible credit (safe debt load):

If your net income (money after taxes ) is $1000 a month, then your annual net income would be ________________.

Calculating 20% of your annual net income to find a safe debt load, would going into debt to fianance a cruise costing $2,500 be considered a safe debt load? Why or why not?

Assuming your income (money after taxes) is a $1000 a month, would it be a responsible credit (safe debt load) to purchase a new High Definition TV with monthly payments of $90? Why or why not? 

Assuming your annual income (money after taxes) is $36,000 and you have college loan payments of $120 a month, car payments of $100 a month and a house morgage of $900 a month, would it be responsible credit (safe debt) to borrow $4800 for a new boat? If the monthly payments for the boat were $375? Why or why not?