The Loan Ranger Case Study

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|Name: Lauren Reed |Date: 3/31/15 | Graded Assignment Practice: The Loan Ranger Answer the following questions based on what you have learned. You may need to search for an online loan calculator to answer the questions. (10 points) |Score | | | 1. The owners of a successful restaurant want a loan for $50,000 to renovate the kitchen and expand the dining room. They expect that the extra tables will add between $2,000 and $5,000 to the restaurant’s monthly revenue. The bank is willing to let the business have an intermediate-term loan of $50,000 for five years, at an interest rate of 6.5 percent. Calculate the monthly payment, and explain whether taking this loan is a smart business decision.…show more content…
(10 points) |Score | | | 2. An online store that has been successfully growing on its initial angel investment and revenues wants to invest $5 million to expand the business. The bank is willing to lend the business this money at a 10 percent interest rate over an eight-year term. Calculate the monthly payment, and explain what the business must be able to do with this money in order for this to be a smart business decision. The monthly payment would be $53,084.34. It is a good business decision because they are using the money to expand and advertise , and in order to make more money you need to expand. (5 points) |Score | |

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