Question: Consider a Khas based financial institution run by Smart Guy, Smart Guy collects 50TL each, from 200 students, promising to pay back everyone on demand

Consider a "Khas based financial institution run by Smart Guy", Smart Guy collects 50TL each, from 200 students, promising to pay back everyone on demand plus 10% interest. Smart Guy turns around and makes 4 one year loans of 2500 TL each. Each loan is charged 20% interest, Supposing everything goes smoothly for one year, what will be Smart Guy's profit?

IV) Refer to Question III. Now suppose 6 months after the arrangement starts, 3 students face an emergency and ask for their money from Smart Guy. (i) How much money does Smart Guy need?

(ii) Does this situation represent a problem for Smart Guy? (111) What "technical terms" can be used to describe Smart Guy's predicament?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Mid to late 19'th century Ottoman economy was basically agrarian, thus farm products constituted roughly 80 % of both GDP and tax revenues. Did this structure have an impact on the Ottoman Treasury's...

3) Consider a Khas based financial institution run by Smart Guy. Smart Guy collects 50TL each, from 200 students, promising to pay back everyone on demand plus 10% interest. Smart Guy turns around...

consider a "Khas based financial instution run by Smart Guy". Smart Guy collects 50tl each,from 200 students , promising to pay back everyone on demand plus 10% interest. Smart Guy turns around and...

1)Consider a Khas based financial institution run by Smart Guy. Smart Guy collects 50TL each, from 200 students, promising to pay back everyone on demand plus 10% interest. Smart Guy turns around and...

Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...

Instead of answer questions at the end of the case! Please briefly analyze the central problems and issues of the case, and provide some meaningful analysis and suggestions. The report should not be...

I need short journal entries for these articles, please. 1) Learning Objectives By the end of this section, you will be able to: Explain the various functions of money Contrast commodity money and...

Please analyze and contrast the Introduction and Literature Review of the articles below. Paul Krugman by Jason Briggeman30 Paul Krugman (1953-) was raised on Long Island "in a safe middle-class...

For some years now, you've owned a small specialty bookshop in a college town. You sell some textbooks but mainly cater to a broader customer base. Your store always stocks the latest fiction,...

The following cost graphs illustrate various types of cost behavior: For each of the following costs, identify the cost graph that best illustrates its cost behavior as the number of units produced...

Compare a corporate legal department with a traditional law firm. What are the differences? What are the similarities?

The production of silver is declining by 6 . 4 % per year. What is the exact half - life of the amount of silver produced each year? Round your answer to the nearest tenth. 1 2 . 1 years 1 0 . 9...

Cash conversion cycle Cash management is a very important function of managers. Companies need to manage their operations in a way that they can sustain growth and yet not run out of cash. Consider...