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Sarah’s gross salary is $200,000 per year. She is interested inpurchasing a $600,000 house. She will make a down payment of 20%and take out a 15 year, 4.5% fixed rate mortgage. The taxes plusinsurance is $8000. In addition, she has student debt and makesannual payments of $6000 per year. What is the Gross Debt Serviceand Total Debt Service ratio? If the bank requires that theseratios must be less than 30 and 35% respectively, can she obtainher mortgage?
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