The answer is it depends. Assuming that the way that you get the present value of the loan is by applying a discount rate to the payment stream to both loans, the obvious answer would be that the desirable one is the one with the lowest present value. However, things are not so simple. You also have to take into consideration the impact on your cash flow. The following thoughts will give you an idea of where I am coming from. - By paying a lower payment, you will have extra cash available to invest. - What kind of return can you make on this extra cash? - This is the main reason why borrowers want longer maturities.
As long as you have had the loan open for 12 months and have been making timely payments it will not lower your credit score. It will actually increase your credit score to pay off early if it is an installment loan.
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As, the present value of future cash flows is determined by the discount rate, so increase or decrease in the discount rate will affect the present value. Discount rate is simply cost or the expense to the company,so in simplest terms, discount rate goes up, cost goes up,so this will lower the present value of cash flows. Assumes a discount rate of 5%,to discount $100 in one years time: Present Value=$100 * 1/(1.05) =$95.24 Ok,as you say,if the discount rate becomes higher,let's say 8%: Present Value=$100 * 1/(1.08) =$92.6 so, the higher the discount rate, the lower the present value.
yes, but it will depend on what you have done since the bankruptcy and of course the lower your score, the higher your interest rate will be. Best thing is to clean up your credit as much as possible and get some revolving and installment accounts. Keep them in good standing. You will need cash down too in this market.
It is one kind of interest rate lower than themarket interest rate for a target group. This type of interest rate was used in USA house mortgage loan to capture all the lower income people. This is the one significant cause of present economic crisis.
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All things being equal, a loan with lower present value is preferred to a loan with lower periodic installment. Simply because you are paying a lower interest. A present value of a loan is determined by 1) amount of loan 2) interest rate 3) number of payment frequency such as monthly, weekly, and etc 4) the size of each periodic payment 5) time of the loan So if 1,3, and 5 remain the same and only 2 and 4 can change, then the relationship is of 2 and 4 is positively correlated. That is the higher the interest rate the higher the size of periodic payment.
loan with lower present value means higher tenure of repayment & because of this higher tenure its present value factor increases and its present value gets reduced. on the other hand loan with lower periodic installments means again you are making repayments over longer period of time. so as far as my knowledge is concerned, both are same
The lower interest rate is always preferred because interest is the amount you pay for borrowing money. In either case, you'll have to pay back the principle, so it amounts to a cost of money borrowed issue. By opting for a lower periodic payment, you are spending more to borrow the same money. Not the best option unless you are the lender.
Cesium is largest element on the periodic table.The atomic radius of Cs is around 273pm. It is present at the lower left corner of the table.
At the lower right corner of the Periodic Table.
Up to 200 grams. But lower is preferable.
The metals in the lower left corner of the periodic table are the least electronegative.
expanded
Left side and lower part
what type of pigment of present
yes stomata are present at lower side