WHAT IT MEANS TO AFFORD A CAR
It may seem simple at first to answer this question. However, "having enough money" and "affording" a vehicle can be two different things.
Lending institutions have a definition of "afford" that is based on something called debt-to-income ratio. The formula for this ratio is:
Debt to income <= 28% of your income
(less than or equal to 28%; this % varies, but is acceptable for this assignment)
Income = gross annual income
(i.e. before taxes)
Debt = revolving charges and loans
So your students should verify that they can afford the car they want by showing that their debt-to-income ratio is at an acceptable level.
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