BUSINESS ADMINISTRATION
BUSINESS MATHEMATICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Because have to pay the operating expenses
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Because we have to pay the interest charge
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Because we have to pay the insurance
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Because we have to pay the finance charge
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Detailed explanation-1: -Therefore, when the total amount (being paid in instalments over a period of time) is certainly higher than the cash down price of the asset because of interest charges.
Detailed explanation-2: -It allows you to reach your purchase cost in a controllable period of time. Without a doubt, installments allow you to buy things that you would otherwise have to give away if you paid in full. Depending on your cash flow timeframe, you can choose to pay in installments and your payment range is up to 30 months.
Detailed explanation-3: -During the 1920s many Americans bought high-cost items, such as refrigerators and cars, on the installment plan, under which they would make a small down payment and pay the rest in monthly installments. Some buyers reached a point where paying off their debts forced them to reduce other purchases.
Detailed explanation-4: -The advantages of installment loans include flexible terms and lower interest rates. The disadvantages of installment loans include the risk of default and loss of collateral.
Detailed explanation-5: -An installment debt is generally repaid in equal monthly payments that include interest and a portion of the principal. This type of loan is an amortized loan that requires a standard amortization schedule to be created by the lender detailing payments throughout the loan’s duration.