Question

John is taking out an amortized loan for 78000 to open a small business and is deciding between the offers from two lenders. What are the options available to John?

1) Lender 1 offers an interest rate of 5% per annum with a loan term of 5 years.
2) Lender 2 offers an interest rate of 4.5% per annum with a loan term of 7 years.
3) Lender 1 offers an interest rate of 4.8% per annum with a loan term of 6 years.
4) Lender 2 offers an interest rate of 5.2% per annum with a loan term of 4 years.

Answer 1

John has four options to choose from when deciding between lenders for his small business loan, each with different interest rates and loan terms. He should carefully consider these factors to determine the best option for his business.

Step-by-step explanation:

John has four options to choose from when deciding between lenders for his small business loan:

1. 
   
3. Lender 1 offers an interest rate of 5% per annum with a loan term of 5 years.
4. 
   
6. Lender 2 offers an interest rate of 4.5% per annum with a loan term of 7 years.
7. 
   
9. Lender 1 offers an interest rate of 4.8% per annum with a loan term of 6 years.
10. 
    
12. Lender 2 offers an interest rate of 5.2% per annum with a loan term of 4 years.

John should consider the interest rate, loan term, and his financial situation before making a decision. It is advisable to calculate the monthly installment and the total amount to be repaid for each option to determine the most suitable one for his business.