COURSE
BUS 1102 – Basic Accounting
The Learning Journal is a space where you should reflect on what was learned during the week and how it applies to your daily life and will help you with your life (career) goals.
For this week, you will be computing interest and explain what you have learned in Unit 6 about borrowing money.
1. You own a farm and grow seasonal products such as pumpkins, squash, and pears. Most of your business revenues are earned during the months of October to December. The rest of your year supports the growing process, where revenues are minimal, and expenses are high. In order to cover the expenses from January to September, you consider borrowing a short-term note from a bank for $300,000. Based on this scenario, please complete the following:
- Research the lending practices of a local bank.
- Determine the interest rate charged for a $300,000 loan.
- Determine the collateral the bank requires to secure the loan?
- Determine your overall payback amount if you were to repay the loan in less than one year.
- Choose either a payback with periodic payments or all at the end of the loan term, and compare the
- outcomes.
- After conducting your research, would you consider borrowing the money?
- What positive and negative outcomes accompany borrowing the money?
2. How much did you know about interest and borrowing money before starting Unit 6?
3. What have you learned about interest and borrowing money in this unit that may help you?
4. Is there anything that you would like to improve upon in this course? Please explain.
Be sure that your Learning Journal entry is a minimum of 500 words. Make sure you cite and reference your sources of information in the APA format.
SOLUTION
- Question 1
Research the lending practices of a local bank.
I decided to go with Equity Bank, a local establishment, since no other financial institution would lend me $300,000. In addition, the loan repayment duration is lengthy at 3 to 4 years compared to other financial institutions, with payment options including semiannual, annual, and monthly installments.
Determine the interest rate charged for a $300,000 loan
When real estate is used as collateral, the interest rate is as high as 14% per year.…..please click the icon below to purchase the solution at $10