A person has a guaranteed income of $200 in the next period. They decide to borrow $50 in the current period to increase their immediate spending, agreeing to an interest rate of 20%. After repaying the loan principal plus all the interest in the next period, how much of their income will be left for consumption?

Evaluating Borrowing Options

Calculating Borrowing Capacity

A person with a future income of $100 and no current income borrows $30 at a 10% interest rate. After repaying the loan and interest, they will have $67 left for future consumption. If the interest rate were to increase to 20%, but the person still borrows the same $30, what would be the impact on their available funds for future consumption?

An individual with a guaranteed future income of $1,000 decides to borrow $200 at an interest rate of 15%. A second individual, also with a guaranteed future income of $1,000, borrows $300 at an interest rate of 5%. True or False: After repaying their respective loans with interest in the future, the first individual will have more money left for consumption than the second individual.

An individual has a guaranteed future income of $100. Match each borrowing scenario with the correct amount of money they will have left for future consumption after repaying the loan and interest.

Determining Original Future Income

Evaluating Loan Options for a Time-Sensitive Purchase

Analyzing Intertemporal Consumption Choices

Calculating an Implicit Interest Rate