Questions on economics essay

Question 1

Henry has purchased a home from Miron. Henry financed his purchase through a bank.  Describe the type of interest that the bank may have in this home.

The bank sets different interest rates on loans. In this situation, Henry purchased a home using the money taken from the bank’s loan. The bank has the right to determine the interest rate for home loans available for the property already constructed. For example, the type of interest that the bank may have on this home is a 30-year fixed loan with an interest rate of 6.5%.  In this case, the loan amount is  $500,000. Henry will pay about $3160.34 monthly for 360 months or 30 years. He will be obliged to pay the same amount monthly until the loan is paid off. The total amount he will pay to the bank on a $500,000 loan at 6.5% over 30 years is  $1,137,722.40.

Question 2

Mary and Rosemary go into business together. What type of business organization may they form?

In this situation, Mary and Rosemary will become business partners as they will go into business together. The type of business organization they may form is a partnership.  A partnership is comprised of two or more business partners. The type of partnership they will form is a general partnership. Both Mary and Rosemary will contribute their resources to business development. Finally, they will divide the profits of their business organization among themselves. Both Mary and Rosemary will have unlimited liability. They will be liable for the debts of their business as well as for any actions they will perform.  The types of business they may choose include service business, merchandising business, manufacturing business, or hybrid business. Anyway, Mary and Rosemary should be well-prepared to make serious decisions and plan their actions based on collaboration and cooperation.