Majestic Bank offers loans at various interest rates, depending on the nature of
ID: 1213149 • Letter: M
Question
Majestic Bank offers loans at various interest rates, depending on the nature of the loan Yakov and Ana both want to borrow $55,000 as a personal loan from the bank. Yaka werks for a small startup company, and his annual earnings depend on how the company performs that year. Ana works for a long-establishe Yakov y. She receives a stable salary, with a bonus if the company performs well during the year. Assume that the duration and the costs of makin .She recetiesastable salary, with s bonus f the company performs well during the year. Assume that the duration and the costfingAna ns are the same. If all else is constant, the bank would most likely charge a higher interest rate toYExplanation / Answer
The bank would most likely charge a higher interest rate to Yakov because the bank would perceive Yukov to have higher risk of default than Ana as Yakov is working in a small startup company and his annual earnings is not stable when compared to Ana.
Benefits in earnings from going to college is $ 60,000 while the total cost of going to college is -$ 40,000
Students who want to maximize monetary benefits do not want to invest in their own human capital.