You've got lucky and about to get married. You are looking for an apartment to buy. Your savings from your stipend is SR100,000 which you will pay as a down payment (initial) for the apartment. The apartment cost is $400,000 in cash. You would like to mortgage the apartment in 4 years. You have two options: Saudi Banks: takes 2% annual interest on the whole loan. US Banks: takes 6% annually on remaining principle. Compare the two options. From a sole economic point of view, which option shall you go with?

You've got lucky and about to get married. You are looking for an apartment to buy. Your savings from your stipend is SR100,000 which you will pay as a down payment (initial) for the apartment. The apartment cost is $400,000 in cash. You would like to mortgage the apartment in 4 years. You have two options: Saudi Banks: takes 2% annual interest on the whole loan. US Banks: takes 6% annually on remaining principle. Compare the two options. From a sole economic point of view, which option shall you go with?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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