Chapter 4.2, Problem 4R

To determine

To explain the disadvantages or demerits of not paying a bill totally when due.

Answer to Problem 4R

The major drawback of late payment or non-payment of a bill totally at the time it is due is the increased cost to be suffered in the form of rate of interest and major effect on the credit score.

Explanation of Solution

The disadvantages of not paying the total bill at the time it is due are mentioned below:

• The very first and major disadvantage would be the creditworthiness affected because of the non-payment.
• The interest amount on such a bill increases when not paid.
• It can create a negative impact and would create difficulties in getting future loans when required.
• The amount can get multiplied if there is more than one bill which can create high pressure on the mind and affect your workings.

Economics Concept Introduction

Introduction:

A bill is a written statement which includes the information about the money owed by someone for any goods or services.

Due date for a bill can be explained as the date at which the bill is due or simply the date by which the bill has to be paid.