Which factor or factors listed below are internal influences on a loan’s interest rate?

I. current and prospective inflation
II. collateral offered by the borrower
III. the strength of the economy

Question

Which factor or factors listed below are internal influences on a loan’s interest rate?

I. current and prospective inflation
II. collateral offered by the borrower
III. the strength of the economy

anonymous · Answer

The answer is c. ll only

anonymous · Answer

Anna’s bank gives her a loan with a stated interest rate of 10.22%. How much greater will Anna’s effective interest rate be if the interest is compounded daily, rather than compounded monthly?

anonymous · Answer

the answer is .0436 percentage points

anonymous · Answer

Why do interest rates on loans tend to be lower in a weak economy than in a strong one?

anonymous · Answer

The answer is c.
In a weak economy there is less demand for credit, so the price drops

anonymous · Answer

When calculating a loan’s effective rate, if the interest compounds every two months, what value of n do you plug into your equation?

anonymous · Answer

the answer is 6