Question: A local bank offers a free checking account if you
A local bank offers a “free” checking account if you maintain a minimum balance of $1,000. Is the account really free? Explain.
Answer to relevant QuestionsWhat institutions are “banks”? What makes an institution a bank, according to the text? Explain how credit serves as a. A shopping convenience b. A means to increase total consumption benefits c. A hedge against inflation d. A source of emergency funds Why should you be particularly concerned about the following items? a. The rule of 78 b. The acceleration clause c. The add-on clause d. A balloon payment 1. Given Helen’s three sources of debt, which is likely to carry the highest APR and which is likely to carry the lowest APR? 2. Which of these debts should she consider paying off first? Why? 3. Helen has to decide ...What is a capitalized cost reduction? What role does it play in determining the adjusted capitalized cost?
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