Carlos Albizu University Week 2 Standard and Discounted Loans Analysis Paper

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Carlos Albizu University

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Week 2

Principles of Finance

Part 1

Discussion Prompt 1-3 Paragraphs

Describe the roles of the different types of financial institutions. Identify which ones you or your family have interactions with and why.

Part 2

Week 2 Assignment: Standard and Discounted Loans

You are the CEO of a hospital and you need to finance new advanced equipment that will cost $100,000. You have the option of a $100,000 standard loan or a discounted loan, both at a 4% annual rate with a one-year maturity date.

In a one- to three-page paper, explain the difference between a standard loan and a discounted loan. What would the effective rate be for the discount loan? Identify which loan you would choose and the reasons why. Would your decision change if the equipment only cost $95,000? Why or why not?

Your paper must follow APA Style formatting throughout.

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Name:
Institution:
Principles of Finance APA Style Question Outline
1. 1st Paragraph
➢ Financial Institutions


Types of financial institutions

2. 2nd and 3rd Paragraph
➢ Standard and Discounted Loans


Running head: PRINCIPLES OF FINANCE

Principles of Finance APA Style Question
Students Name
Institution Name

1

PRINCIPLES OF FINANCE

2
Part 1
Financial Institutions

Financial institutions are corporations that grant financial services. There exist several
financial institutions with varying roles. The first type is of such institutions are banks, which are
institutions that accept deposits, provide loans, and invest in securities. The second type of
financial institution is the credit unions who have a similar service as a bank in te...

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