You Have Invested $50,000 in the Start-Up of Your Friend's

question 10

Essay

You have invested $50,000 in the start-up of your friend's biotech business.He has offered you the following three repayment options.Interest rates are currently at 8%.Which one do you prefer? Support your answer.Are there any other factors you would like to consider?
A) A $75,000 lump sum payment in 5 years.B) 10 years of monthly payments of $725.
C) Monthly payments of $500 for 20 years and a final single payment of your full $50,000.

• A) A $75,000 lump sum payment in 5 years.B) 10 years of monthly payments of $725.
• C) Monthly payments of $500 for 20 years and a final single payment of your full $50,000.

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Definitions:

Complements

Items or services that complement each other in such a way that a rise in demand for one results in a rise in demand for its counterpart.

Demand Curve

A graph that represents the relationship between the price of a good or service and the quantity demanded by consumers.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at various prices.

Excise Tax

A tax levied on specific goods, services, or activities, such as gasoline, cigarettes, or alcohol, often to discourage consumption or generate revenue.