An Individual Plans to Borrow a Sum of $10,000 for 1

question 133

Essay

An individual plans to borrow a sum of $10,000 for 1 year.The nominal interest charged on the borrowed sum is 6 percent.
a)If he takes the loan,what will be the interest amount and the total amount that he would have to pay at the end of the year?
b)If the rate of inflation in the economy is 10 percent,then is it a good idea for him to take the loan? Why or why not?

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Definitions:

Neat Freak

An informal term for someone who is obsessively clean or orderly, often going to great lengths to maintain a specific level of tidiness.

Neatness

The quality of being clean, orderly, and tidy.

Major Consequence

A significant outcome or result that follows an action, decision, or event, often having long-lasting effects.

Work Habits

A person’s characteristic approach to work, including such things as organization, priority setting, and handling of paperwork, e-mail, and intranets.