Kim is trying to decide whether she can afford a loan she needs in order to go to chiropractic school. Currently, Kim is living at home and works part-time in a shoe store, earning a gross income of [tex]$\$[/tex]1,760[tex]$ per month. Her employer deducts $[/tex]\[tex]$199$[/tex] for taxes from her monthly pay. Kim also pays [tex]$\$[/tex]189[tex]$ on several credit card debts each month. The loan she needs for chiropractic school will cost an additional $[/tex]\[tex]$172$[/tex] per month. Help Kim make her decision by calculating her debt payments-to-income ratio with and without the college loan. (Remember the 20 percent rule.)

Note: Enter your answers as a percent rounded to 2 decimal places.

[tex]\[
\begin{tabular}{|l|l|}
\hline
\textbf{Debt Payments-to-Income Ratio} & \textbf{Percentage} \\
\hline
Ratio with college loan & \quad \_\_\_\_ \% \\
\hline
Ratio without college loan & \quad \_\_\_\_ \% \\
\hline
\end{tabular}
\][/tex]

To help Kim decide whether she can afford the loan for chiropractic school, we need to calculate her debt payments-to-income ratio both with and without the college loan. This ratio will show us what percentage of her monthly net income is used to pay debts. According to the 20 percent rule, it is generally advised not to exceed 20% of your income on debt payments.

Let's proceed with the step-by-step calculations:

1. Calculate Kim's Net Income:
- Gross Income: [tex]$\$[/tex] 1,760[tex]$ - Tax Deductions: $[/tex]\[tex]$ 199$[/tex]

Net Income = Gross Income - Tax Deductions
Net Income = [tex]$1,760 - 199 = \$[/tex] 1,561[tex]$ 2. Calculate Debt Payments Without the College Loan: - Credit Card Debt Payments: $[/tex]\[tex]$ 189$[/tex]

Since there is no additional loan cost without the college loan,
Debt Payments Without Loan = Credit Card Debt Payments = [tex]$\$[/tex] 189[tex]$ 3. Calculate Debt Payments With the College Loan: - Credit Card Debt Payments: $[/tex]\[tex]$ 189$[/tex]
- College Loan Cost: [tex]$\$[/tex] 172[tex]$ Debt Payments With Loan = Credit Card Debt Payments + College Loan Cost Debt Payments With Loan = $[/tex]189 + 172 = \[tex]$ 361$[/tex]

4. Calculate Debt Payments-to-Income Ratio Without the College Loan:
- Debt Payments Without Loan: [tex]$\$[/tex] 189[tex]$ - Net Income: $[/tex]\[tex]$ 1,561$[/tex]

Ratio Without Loan = (Debt Payments Without Loan / Net Income) 100
Ratio Without Loan = ([tex]$189 / $[/tex]1,561) 100 ≈ 12.11%

5. Calculate Debt Payments-to-Income Ratio With the College Loan:
- Debt Payments With Loan: [tex]$\$[/tex] 361[tex]$ - Net Income: $[/tex]\[tex]$ 1,561$[/tex]

Ratio With Loan = (Debt Payments With Loan / Net Income) 100
Ratio With Loan = ([tex]$361 / $[/tex]1,561) 100 ≈ 23.13%

Therefore, the debt payments-to-income ratios are as follows:
- Ratio without college loan: 12.11%
- Ratio with college loan: 23.13%

Since the ratio with the college loan (23.13%) exceeds the advised 20% limit, Kim should carefully consider whether she can afford this additional financial burden.