Please answer all, Comparing Types of LoansPayday loans are much more expensive than other types of loans, including creditcards. But how much are you really paying? How does the cost of a payday loancompare with taking a cash advance on a credit card, using overdraft protection onyour bank account or borrowing on a line of credit?Let's compare the cost of using different types of loans. We'll assume that you borrow$300, for 14 days. Note the considerable difference in the cost of each type of loan.Comparing the cost of a $300 loan, taken for 14 daysıPayday loan Credit CardBorrowingprotection from a line ofcreditOverdraftCashadvanceInterest$2.13$2.42$1.15Applicable fees$69.00$2.00Total cost of loan$69.00$4.13$2.42$1.15Cost of the loan600%36% per21% per10% perexpressedpercentage of theamount borrowed3as aper yearyearyearyearComparing the cost of a payday loan with other types ofshort-term loansBased on a $300 loan taken for 14 days$60.00$50.00$50.00$40.00E $30.00$20.00$10.00$4.13$1.15$2.42$0.00Cash advanceon acredit cardBorrowing froma line of creditOverdraftprotection ona bank accountPayday loanType of loanCost of lean 1. Barry is going to post-secondary school for three years. Should Barry get aStudent Loan or Personal Line of Credit to pay for his education? Why?2. Larry needs a new fridge. He does not have the money, but needs a fridge.Should Larry use a Credit Card, Installment Plan or Payday Loan to purchasethe fridge? Why?3. When would you would use a Personal Loan? Why would you choose aPersonal Loan over other methods of Credit?4. When would you would use a Mortgage? Why would you choose aMortgage over other methods of Credit?

1. Barry is going to post-secondary school for three years. Should Barry get a Student Loan or Personal Line of Credit to pay for his education? Why? 2. Larry needs a new fridge. He does not have the money, but needs a fridge. Should Larry use a Credit Card, Installment Plan or Payday Loan to purchase the fridge? Why? 3. When would you would use a Personal Loan? Why would you choose a Personal Loan over other methods of Credit? 4. When would you would use a Mortgage? Why would you choose a Mortgage over other methods of Credit?

1. Barry is going to post-secondary school for three years. Should Barry get a Student Loan or Personal Line of Credit to pay for his education? Why? 2. Larry needs a new fridge. He does not have the money, but needs a fridge. Should Larry use a Credit Card, Installment Plan or Payday Loan to purchase the fridge? Why? 3. When would you would use a Personal Loan? Why would you choose a Personal Loan over other methods of Credit? 4. When would you would use a Mortgage? Why would you choose a Mortgage over other methods of Credit?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

Hendo Corp. can borrow from its bank using a one year (a) simple interest loan with an 11.3% quoted rate and no compensating balance or (b) a discount interest loan with a quoted rate equal to 9.9% that requires a 15% compensating balance. What is the EAR of the lower cost loan? Hendo Corp. normally tries to keep its checking account balance close to $0.
Which of the following is true about credit card finance? a. Interest rates are high on credit card b. Provides interest free credit for 12 months c. All the options are wrong d. Credit card comes unlimited credit limit
After examining the various personal loan rates available to you, you find that you can borrow funds from a finance company at 8 percent compounded or from a bank at 9 percent compounded . Which alternative is more attractive?
Mint.com, GoodBudget, Mvelopes, BillGuard, PocketExpense, HomeBudget, and Expensify. After using Mint.com, you realize you need to pay off one of your high interest loans to reduce your interest expense. You decide to discount a $5,300, 340-day note at 2% to your bank at a discount rate of 5.0% on day 200. What are your proceeds?
In Financial mathamatics I am having problems determining how long the term of a loan is; the question is pasted below I have to determine how long the loan is for, how do I find this? In order to plant Christmas trees in another field, Roy signed a note with a face value of $21,000 at a 7% discount rate. Find the length of the loan in days given that the discount is $408.33. Use banker's interest of 360 days.
You are the loan department supervisor for a bank. This installment loan is being paid off early, and it is your task to calculate the rebate fraction, the finance charge rebate (in $), and the payoff for the loan (in $). (Round dollars to the nearest cent.) AmountFinanced Number ofPayments MonthlyPayment PaymentsMade RebateFraction FinanceChargeRebate LoanPayoff $4,600 36 $165.33 32 $ $ :)
Consider a $5,000, 6%, 180-day interest-bearing note and a non-interest- bearing note for the same amount and time period with a bank discount of 6%. From the borrower’s point of view, which is the better loan and why?
After examining the various personal loan rates available to you, you find that you can borrow funds from a finance company at 9% compounded weekly or from a bank at 10% compounded monthly. Which alternative is more attractive? If you can borrow funds from a finance company at 9% compounded weekly, the EAR for the loan is %
You are the loan department supervisor for a bank. This installment loan is being paid off early, and it is your task to calculate the rebate fraction, the finance charge rebate (in $), and the payoff for the loan (in $). (Round dollars to the nearest cent.
You see that First National Bank is willing to make you a four-year $40,000 car loan with an interest rate of 4.2%. However, the same bank will charge you 16.5% interest on a credit card that it issues. Why is the interest rate on the credit card so much higher than the interest rate on the car loan?
Which of the following is true about credit card finance? a.All the options are wrong b.Credit card comes without a credit limit c.Provides interest free credit for 12 months d.Interest rates are high on credit card
Paige is planning on depositing $1,000 in one of two different savings accounts from two financial institutions: MoneyFirst and MakeCents. The MoneyFirst account offers an interest rate of 0.15% APR, compounded monthly. The MakeCents account offers an interest rate of 0.14% APR, compounded weekly. Which is the better financial decision: the higher interest rate or the more frequent compounding? Higher interest rate More frequent compounding

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