Maria Ivanov has owned a successful clothing boutique chain for 20 years. She has gone into debt several times to expand her business. Each time, she paid off the debt in full sooner than expected.
Question
Use the scenario to answer the question.
How will Maria’s record affect the loans she is offered?
(1 point)
Responses
She will be offered longer terms.
She will be offered longer terms.
She will be offered shorter terms.
She will be offered shorter terms.
She will be offered lower interest rates.
She will be offered lower interest rates.
She will be offered higher interest rates.
She will be offered higher interest rates.
She will be offered lower interest rates.
In which economic situation would interest rates decrease?
(1 point)
Responses
Most people are saving rather than buying houses.
Most people are saving rather than buying houses.
Average families are choosing to invest in new businesses.
Average families are choosing to invest in new businesses.
High consumption is driving a surge in the services sector.
High consumption is driving a surge in the services sector.
Increased job stability is encouraging workers to make big purchases.
Most people are saving rather than buying houses.
CAR FINANCING FOR LESS
2-YEAR TERM
UP TO $40,000
6% COMPOUNDED ANNUALLY WITH A $500 UP-FRONT PAYMENT
Question
What part of the offered deal is the interest rate?
(1 point)
Responses
2 YEAR TERM
2 YEAR TERM
UP TO $40,000
UP TO $40,000
6% COMPOUNDED ANNUALLY
6% COMPOUNDED ANNUALLY
$500 UP-FRONT PAYMENT
$500 UP-FRONT PAYMENT
The interest rate is 6% compounded annually.
Based on the scenario provided, Maria's record of successfully paying off her debts in full sooner than expected will generally have a positive impact on the loans she is offered. Lenders are likely to see her as a reliable borrower who is capable of managing her debt and meeting her financial obligations. As a result, Maria can expect to be offered:
1. Longer terms: Lenders may be more willing to extend the repayment period for her loans, giving her more time to pay off the debt. This can help reduce her monthly payment obligations and provide flexibility in her financial planning.
2. Lower interest rates: With a proven track record of consistently paying off her debts, lenders may see Maria as a lower risk borrower. This may lead to her being offered loans with lower interest rates, saving her money in the long run.
It is important to note that the scenario does not mention any negative impact or missed payments from Maria's past borrowing history. Therefore, the options mentioning shorter terms or higher interest rates are not applicable in this case.