Please answer all, Comparing Types of LoansPayday loans are much more expensive than other types of loans, including creditcards. But how much are you really paying? How does the cost of a payday loancompare with taking a cash advance on a credit card, using overdraft protection onyour bank account or borrowing on a line of credit?Let's compare the cost of using different types of loans. We'll assume that you borrow$300, for 14 days. Note the considerable difference in the cost of each type of loan.Comparing the cost of a $300 loan, taken for 14 daysıPayday loan Credit CardBorrowingprotection from a line ofcreditOverdraftCashadvanceInterest$2.13$2.42$1.15Applicable fees$69.00$2.00Total cost of loan$69.00$4.13$2.42$1.15Cost of the loan600%36% per21% per10% perexpressedpercentage of theamount borrowed3as aper yearyearyearyearComparing the cost of a payday loan with other types ofshort-term loansBased on a $300 loan taken for 14 days$60.00$50.00$50.00$40.00E $30.00$20.00$10.00$4.13$1.15$2.42$0.00Cash advanceon acredit cardBorrowing froma line of creditOverdraftprotection ona bank accountPayday loanType of loanCost of lean 1. Barry is going to post-secondary school for three years. Should Barry get aStudent Loan or Personal Line of Credit to pay for his education? Why?2. Larry needs a new fridge. He does not have the money, but needs a fridge.Should Larry use a Credit Card, Installment Plan or Payday Loan to purchasethe fridge? Why?3. When would you would use a Personal Loan? Why would you choose aPersonal Loan over other methods of Credit?4. When would you would use a Mortgage? Why would you choose aMortgage over other methods of Credit?

1. Barry is going to post-secondary school for three years. Should Barry get a Student Loan or Personal Line of Credit to pay for his education? Why? 2. Larry needs a new fridge. He does not have the money, but needs a fridge. Should Larry use a Credit Card, Installment Plan or Payday Loan to purchase the fridge? Why? 3. When would you would use a Personal Loan? Why would you choose a Personal Loan over other methods of Credit? 4. When would you would use a Mortgage? Why would you choose a Mortgage over other methods of Credit?

1. Barry is going to post-secondary school for three years. Should Barry get a Student Loan or Personal Line of Credit to pay for his education? Why? 2. Larry needs a new fridge. He does not have the money, but needs a fridge. Should Larry use a Credit Card, Installment Plan or Payday Loan to purchase the fridge? Why? 3. When would you would use a Personal Loan? Why would you choose a Personal Loan over other methods of Credit? 4. When would you would use a Mortgage? Why would you choose a Mortgage over other methods of Credit?

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter7: Credit Cards And Consumer Loans

Section: Chapter Questions

Problem 2LTAI

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