The reason behind the usage of consumer credit and lay down the benefits and problems associated with it.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 6, Problem 1LO

Summary Introduction

To determine: The reason behind the usage of consumer credit and lay down the benefits and problems associated with it.

Expert Solution & Answer

Explanation of Solution

The major reasons for which the consumer credit is used by the individuals are as follows:

In order to make the purchases of expensive items without investing the huge amount at the single point of time.
In order to meet the requirements at the time of emergency such as meting living expenses in the time of job loss or for paying the visit in the time of emergency.
To pay the bills of various outlets or to pay the fees of various services from the place of convenience.
Investments policies are purchased by using the funds from the consumer credit by many individuals.

Benefits of using the consumer credit are as follows:

Helps to purchase the expensive items like car, furniture without disturbing the cash budget of the individuals.
Easy availability of funds at the time of emergency.

Problems associated with the usage of consumer credit are as follows:

Higher interest rates to be paid by the borrower on the borrowed amounts.
Overspending the credit amount will become a debt trap which may lead into bankruptcy, poor credit ratings or the lawsuits.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

1. Give one new distribution channels for Virtual Assistance (freelance business) that is not commonly used. - show a chart/diagram to illustrate the flow of the distribution channels. - explain the rationale behind it. (e.g., increased market reach, improved customer experience, cost-efficiency). - connect the given distribution channel to the marketing mix: (How does it align with the overall marketing strategy? Consider product, price, promotion, and place.). - define the target audience: (Age, gender, location, interests, etc.). - lastly, identify potential participants: (Wholesalers, retailers, online platforms, etc.)

An individual is planning for retirement and aims to withdraw $100,000 at the beginning of each year, starting from the first year of retirement, for an expected retirement period of 20 years. To fund this retirement plan, he intends to make 20 equal annual deposits at the end of each year during his working years. Assume a simple annual interest rate of 20% during his working years and a simple annual interest rate of 5% during retirement. What should his annual deposit amount be to achieve his desired retirement withdrawals? Please write down the steps of your calculation and explain result economic meaning.

Assume an investor buys a share of stock for $18 at t=0 and at the end of the next year (t=1), he buys 12 shares with a unit price of $9 per share. At the end of Year 2 (t=2), the investor sells all shares for $40 per share. At the end of each year in the holding period, the stock paid a $5.00 per share dividend. What is the annual time-weighted rate of return? Please write down the steps of your calculation and explain result economic meaning.

Answer 2

Question

Chapter 6, Problem 1LO

Summary Introduction

To determine: The reason behind the usage of consumer credit and lay down the benefits and problems associated with it.

Expert Solution & Answer

Explanation of Solution

The major reasons for which the consumer credit is used by the individuals are as follows:

In order to make the purchases of expensive items without investing the huge amount at the single point of time.
In order to meet the requirements at the time of emergency such as meting living expenses in the time of job loss or for paying the visit in the time of emergency.
To pay the bills of various outlets or to pay the fees of various services from the place of convenience.
Investments policies are purchased by using the funds from the consumer credit by many individuals.

Benefits of using the consumer credit are as follows:

Helps to purchase the expensive items like car, furniture without disturbing the cash budget of the individuals.
Easy availability of funds at the time of emergency.

Problems associated with the usage of consumer credit are as follows:

Higher interest rates to be paid by the borrower on the borrowed amounts.
Overspending the credit amount will become a debt trap which may lead into bankruptcy, poor credit ratings or the lawsuits.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 6, Problem 1LO

Summary Introduction

To determine: The reason behind the usage of consumer credit and lay down the benefits and problems associated with it.

Expert Solution & Answer

Explanation of Solution

The major reasons for which the consumer credit is used by the individuals are as follows:

In order to make the purchases of expensive items without investing the huge amount at the single point of time.
In order to meet the requirements at the time of emergency such as meting living expenses in the time of job loss or for paying the visit in the time of emergency.
To pay the bills of various outlets or to pay the fees of various services from the place of convenience.
Investments policies are purchased by using the funds from the consumer credit by many individuals.

Benefits of using the consumer credit are as follows:

Helps to purchase the expensive items like car, furniture without disturbing the cash budget of the individuals.
Easy availability of funds at the time of emergency.

Problems associated with the usage of consumer credit are as follows:

Higher interest rates to be paid by the borrower on the borrowed amounts.
Overspending the credit amount will become a debt trap which may lead into bankruptcy, poor credit ratings or the lawsuits.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 6, Problem 1LO

Summary Introduction

To determine: The reason behind the usage of consumer credit and lay down the benefits and problems associated with it.

Expert Solution & Answer

Explanation of Solution

The major reasons for which the consumer credit is used by the individuals are as follows:

In order to make the purchases of expensive items without investing the huge amount at the single point of time.
In order to meet the requirements at the time of emergency such as meting living expenses in the time of job loss or for paying the visit in the time of emergency.
To pay the bills of various outlets or to pay the fees of various services from the place of convenience.
Investments policies are purchased by using the funds from the consumer credit by many individuals.

Benefits of using the consumer credit are as follows:

Helps to purchase the expensive items like car, furniture without disturbing the cash budget of the individuals.
Easy availability of funds at the time of emergency.

Problems associated with the usage of consumer credit are as follows:

Higher interest rates to be paid by the borrower on the borrowed amounts.
Overspending the credit amount will become a debt trap which may lead into bankruptcy, poor credit ratings or the lawsuits.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 6, Problem 1LO

Summary Introduction

To determine: The reason behind the usage of consumer credit and lay down the benefits and problems associated with it.

Expert Solution & Answer

Explanation of Solution

The major reasons for which the consumer credit is used by the individuals are as follows:

In order to make the purchases of expensive items without investing the huge amount at the single point of time.
In order to meet the requirements at the time of emergency such as meting living expenses in the time of job loss or for paying the visit in the time of emergency.
To pay the bills of various outlets or to pay the fees of various services from the place of convenience.
Investments policies are purchased by using the funds from the consumer credit by many individuals.

Benefits of using the consumer credit are as follows:

Helps to purchase the expensive items like car, furniture without disturbing the cash budget of the individuals.
Easy availability of funds at the time of emergency.

Problems associated with the usage of consumer credit are as follows:

Higher interest rates to be paid by the borrower on the borrowed amounts.
Overspending the credit amount will become a debt trap which may lead into bankruptcy, poor credit ratings or the lawsuits.

Answer 6

Chapter 6, Problem 1LO

Summary Introduction

To determine: The reason behind the usage of consumer credit and lay down the benefits and problems associated with it.

Expert Solution & Answer

Explanation of Solution

The major reasons for which the consumer credit is used by the individuals are as follows:

In order to make the purchases of expensive items without investing the huge amount at the single point of time.
In order to meet the requirements at the time of emergency such as meting living expenses in the time of job loss or for paying the visit in the time of emergency.
To pay the bills of various outlets or to pay the fees of various services from the place of convenience.
Investments policies are purchased by using the funds from the consumer credit by many individuals.

Benefits of using the consumer credit are as follows:

Helps to purchase the expensive items like car, furniture without disturbing the cash budget of the individuals.
Easy availability of funds at the time of emergency.

Problems associated with the usage of consumer credit are as follows:

Higher interest rates to be paid by the borrower on the borrowed amounts.
Overspending the credit amount will become a debt trap which may lead into bankruptcy, poor credit ratings or the lawsuits.

Answer 7

Chapter 6, Problem 1LO

Summary Introduction

To determine: The reason behind the usage of consumer credit and lay down the benefits and problems associated with it.

Answer 8

Expert Solution & Answer

Explanation of Solution

The major reasons for which the consumer credit is used by the individuals are as follows:

In order to make the purchases of expensive items without investing the huge amount at the single point of time.
In order to meet the requirements at the time of emergency such as meting living expenses in the time of job loss or for paying the visit in the time of emergency.
To pay the bills of various outlets or to pay the fees of various services from the place of convenience.
Investments policies are purchased by using the funds from the consumer credit by many individuals.

Benefits of using the consumer credit are as follows:

Helps to purchase the expensive items like car, furniture without disturbing the cash budget of the individuals.
Easy availability of funds at the time of emergency.

Problems associated with the usage of consumer credit are as follows:

Higher interest rates to be paid by the borrower on the borrowed amounts.
Overspending the credit amount will become a debt trap which may lead into bankruptcy, poor credit ratings or the lawsuits.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 6 - Prob. 1LO Ch. 6 - Prob. 2LO Ch. 6 - Prob. 3LO Ch. 6 - Prob. 4LO Ch. 6 - Prob. 5LO Ch. 6 - Prob. 6LO Ch. 6 - Prob. 1FPE Ch. 6 - Prob. 2FPE Ch. 6 - Prob. 3FPE Ch. 6 - Prob. 4FPE

The reason behind the usage of consumer credit and lay down the benefits and problems associated with it.

Concept explainers

To determine: The reason behind the usage of consumer credit and lay down the benefits and problems associated with it.

Explanation of Solution

Want to see more full solutions like this?

Chapter 6 Solutions