A salaried borrower earns $78,000 per year with no additional income. What gross monthly income is used for a basic monthly calculation?
Correct Answer
A) $6,500
Why this is correct: For a salaried borrower with no additional income, the gross monthly income is simply the annual salary divided by 12 months. As the original explanation states: $78,000 per year ÷ 12 months = $6,500 per month. Why the other choices are wrong: "$6,000" is wrong; it might come from an incorrect division or rounding. "$7,800" is wrong; this could result from dividing by 10 instead of 12. "$9,360" is wrong; it appears to be 12% of the annual salary or another unrelated calculation. Exam tip: For simple salary conversion, always divide the annual gross salary by 12. Do not apply any deductions or adjustments unless the question specifically instructs you to.
Why This Is the Correct Answer
Why this is correct: For a salaried borrower with no additional income, the gross monthly income is simply the annual salary divided by 12 months. As the original explanation states: $78,000 per year ÷ 12 months = $6,500 per month. Why the other choices are wrong: "$6,000" is wrong; it might come from an incorrect division or rounding. "$7,800" is wrong; this could result from dividing by 10 instead of 12. "$9,360" is wrong; it appears to be 12% of the annual salary or another unrelated calculation. Exam tip: For simple salary conversion, always divide the annual gross salary by 12. Do not apply any deductions or adjustments unless the question specifically instructs you to.
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