hello could you please help me with A & B & C & D . Thank :) Consolidation as a
ID: 2730107 • Letter: H
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hello could you please help me with A & B & C & D .
Thank :)
Consolidation as a Debt Reduction Justin Granovsky, an assistant manager at a small retail shop in Las Vegas, Nevada, had an unusual amount of debt. He owed $5400 to one bank, S1800 to a clothing store, othe to to his credit union, and several hundred dolla r stores and individuals. Justin was paying more than when month on the three major obligations to pay them off two years. He realized that his take-home pay with slightly more than S2100 per month did not leave him much excess cash. Justin discussed an alternative way of handling his major with his and take The officer suggested that he pool all of his debts out an S11,000 loan for seven years at 14 As a result, would pay only $206 per month for all his Justin seemed over the idea. (a) Is Justin's enthusiasm over the idea of a debt consolidation loan justified? Why why (b) Why can the bank offer such a "good deal" to Justin (c) hat compromise would Justin make to remit payments of only S206 as compared with $460? (d) If you assume that the debt-consolidation loan will cost more in total interest, what would be a justification for this added cost?Explanation / Answer
a)Yes, it is justified as he would be consolidating all his debt with a small loan that he only pays for seven years rather than owing the entire amount and possibly paying on those debts his entire life or filing for bankruptcy
b)The bank can offer Justin a “good deal” as he owes a lot of money to many different businesses and cannot afford to pay an amount to each individual business
c)The compromise is that Justin would have to sign for a somewhat large fixed loan of seven years with a high interest rate
d)If the debt-consolidation loan costs more in total interest, the justification for this added cost would be if at any point during the seven years he could pay off the loan completely if he ever ran into a big amount of money. He would not have to worry about owing anyone after the seven years of paying on time with that fixed rate. He does not have to worry about the rate on the amount he owes rising
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