6. Sharon lives in Saskatoon. She wants to go to the West Edmonton Mall for a shopping trip with her friends. She does not have a job or much money. She decides to pay for the trip with her credit card. Do you think this is wise? Explain. 7. Suppose you are borrowing $500 for 10 d from a financial institution. What would be the least expensive way? Explain.
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- Kayla Gordan plans to borrow $300,000 from ANZ bank to set up a Nail Salon.She currently has $10,000 in savings and she will use her house as security for the loan.Which of the following best represents a risk associated with this financing method? A.Kayla's proportion of business ownership will be diluted B.Interest payments are tax deductible C.Bank will repossess her house if she defaults on the loan D.Kayla is required to pay dividends to the bankJudy is a 16-years old who just got her first job. She wants a credit card or debit card to spend money she will be earning. Judy’s parents worry about her spending money she doesn’t own, and don’t want her to accrue heavy interest. Which type of card should she get. a) Credit card with no fee b) A debit card Explain your choice:Discuss the following scenarios, then to decide which option is best and why. Susan and Jose rent an apartment and have been saving for a house. They now have $10,000 in the bank. Susan owes $4,000 on a low-interest credit card; Jose owes $4,500 on his car. Susan wants to pay the credit card and car off to eliminate the debt. Jose wants to keep the cash in the bank and continue saving for the house. What are the pros and cons of each one’s argument? Please be detailed and concise. Feel free to use a chart or table to represent your argument. Jack is a 40-year-old construction worker. He makes $33,500 per year. He only saves 5 percent of his salary per year since it is all he feels he can afford. His friend Joe suggests that he invest his money conservatively so that it won’t lose as much value if the market takes a nosedive. His other friend Jim thinks that investing aggressively with high risk is the way to go since Jack has several years to work to make up for any losses. What do…
- 15) Ms. Day needs $20,000 to buy her dream car. In her search for the best (low cost) loan, she has gathered the following information from three local banks. Which bank would you recommend Ms. Day borrow from? BANK ANUAAL PAYMENT TERM or YEARS A 8,326.40$ 3 B 6,309.15$ 4 C 5,411.25$ 51. Which two types of natural disasters are not normally covered in a homeowner’s policy? 6. Kim just paid off her house and is thinking about no longer having homeowners insurance (her bank required it as part of her mortgage agreement). Her house is worth $300,000. What are the pros and cons of this decision? 7. Would your answer to the previous question change if you found out that Kim has $3,000,000 in the bank?Tamara is not a big spender and rarely has a credit card balance over $500. What should Tamara look for in a credit card given the way she uses one? Group of answer choices a. A long grace period b. A low interest rate c. A high annual fee d. No grace period e. A high interest rate
- Excited to buy her dream car, Molly rushes into her local Jeep dealership. Molly picks out a car, sits down at the financing desk, and hears the following, “Well we ran your credit history. You’ve got a really thin file just a years worth of student loan payments. The deal you saw was for ‘well- qualified buyers.’ The best deal we can offer you is 6.6% for 60 months. A little more bad news, the cash allowance is also based on credit history, so you don’t qualify for $500. That said, you’re excited about a keep and I want to see you driving one, so I can do $400 for you. How much total interest will Molly pay using this plan? How much will Molly’s monthly payment be using the Bankrate calculator in the screen shot below?Suppose that you withdraw ₱ 1,500.00 from your savings account. Over the weekend, several people want to borrow money from you. Read the stories and decide to whom you will lend your money. Story 1. Your younger sister is having a garage sale. She needs cash to make a change for the day. She will sell you a bond for ₱ 1,000.00 You will keep the bond for a week, and she promises to pay you back. Story 2. Your older brother has a small business idea but doesn’t have any money. He wants to borrow your ₱ 1,500.00 and promises to pay you back ₱1,800.00 in four weeks. Story 3. Your best friend at school, whom you know very well, wants to borrow your ₱1,500.00 to buy cupcakes. She plans to sell at a higher price and promises to pay you back ₱1,700.00 in two weeks. Whose bonds will you buy? Why? (WITH SOLUTION)Suppose that you withdraw ₱ 1,500.00 from your savings account. Over the weekend, several people want to borrow money from you. Read the stories and decide to whom you will lend your money. Story 1. Your younger sister is having a garage sale. She needs cash to make a change for the day. She will sell you a bond for ₱ 1,000.00 You will keep the bond for a week, and she promises to pay you back. Story 2. Your older brother has a small business idea but doesn’t have any money. He wants to borrow your ₱ 1,500.00 and promises to pay you back ₱1,800.00 in four weeks. Story 3. Your best friend at school, whom you know very well, wants to borrow your ₱1,500.00 to buy cupcakes. She plans to sell at a higher price and promises to pay you back ₱1,700.00 in two weeks. Whose bonds will you buy? Why?
- Let's say you showed your friend Cardi all these calculations, and she went, "Man, this is screwed up! Credit cards are a racket!" (Yes, Cardi, they are - if you don't pay your balance in full every month, that is.) But it's not all bad news, you tell Cardi. There is something she can do in order to reduce both her cost of borrowing and the length of time she'll be in debt. What can she do? (check all answers that apply) a. Ask her credit card company to shorten the duration of the loan. b. Make her payments earlier in the month rather than later. c. Transfer the balance to a lower interest card with another bank. d. Complain to the Consumer Financial Protection Bureau. e. Pay more than $400 every month. f. Ask her credit card company to lower the 29% interest rate. g. Occasionally make additional payments to the account.Aina just got her driver license, and she wants to buy a new car cost for RM70,000. She has RM3,000 to invest as a lump sum today. Aina is a conservative investor and she only invests in safe products. After approaching different banks, she is offered the following investment opportunities. Union Bank’s savings account with an interest rate 10.8% compounded monthly. First State Bank’s savings account with an interest rate of 11.5% compounded annuallyJing, a recent engineering graduate, never took engineering economics. When she graduated, she was hired by a prominent engineering firm. The earnings from this job allowed her to deposit $1000 each quarter into a savings account. There were two banks that offered savings accounts in her town (a small town!). The first bank was offering 5.0% interest compounded continuously. The second bank offered 5.125% compounded monthly. Jing decided to deposit in the first bank because it offered continuous compounding. Did she make the right decision?