All categories

4 years ago

Where do banks get money to lend to borrowers?

Business

2 answers:

Korolek [52]4 years ago

7 0

<u>The option D is correct. </u>

<u>Banks get money to lend to borrowers from the depositors. </u>

Further Explanation:

The bank provides the money to the borrowers and deposits the money from the savers. The people save their excess money in the bank to earn the interest on the deposit money. The borrowers get the money from the bank and pay interest on the borrowing amount.

Depositors are those people who saves their money in the bank. Borrowers are those people who takes loan from the bank.

Justification for the correct and incorrect answer:

The bank’s management: This option is incorrect.

The bank’s management is the process involved in managing the bank. The management takes decision whether to give the loan to the person or not, how much amount of loan is to be extent. So, this option is incorrect.

Shareholders: This option is incorrect.

Shareholders are the owner of the bank, they provide finance to the bank for expanding the business. The amount of shareholder money cannot be used to provide loan. This option is not correct.

Government: This option is incorrect.

The government does not provide any type of financial help to provide the loan to the lender. So, this option is incorrect.

Depositors: This option is correct.

Depositors are those people who saves their money in the bank. This money is utilized for providing the loan to the borrower. So, this option is correct.

Learn more:

1. Learn more about federal reserve bank

<u>brainly.com/question/9417688 </u>

2. Learn more about recording bank account

<u>brainly.com/question/3212764 </u>

3. Learn more about national retails bank

<u>brainly.com/question/7706363 </u>

Answer details:

Grade: Middle School

Subject: Banking

Chapter: Borrowing

Keywords:

bank, lend, borrowers, customer, depositor, bank’s management, government, shareholders, excess money, interest rate, money, managing, owner, expanding the business, finance, borrowing.

Marysya12 [62]4 years ago

5 0

The answer is<u> "depositors".</u>

An individual who is making a deposit with the bank is known as a depositor. The depositor is the moneylender of the cash which will be come back to him/her toward the finish of the store time frame.

A depositor (you) places cash in a banks vault, at that point the bank putts enthusiasm on it, and can utilize it in the event that it needs to. Up to a specific measure of it remains in the bank on the off chance that you need to come and withdraw.

You might be interested in

Differentiate between Cloud computing<br> and Grid computing.

Sladkaya [172]

<h3>Answer:</h3>

Cloud computing is based on a Client-Server model. Cloud computing is a highly accessible service that utilizes centralized resources. Cloud computing is a pay-as-you-go model, which implies that customers pay for the service they get.

The second one, is a distributed computer model known as Grid Computing. Users in grid computing do not have to pay for the usage of resources in a collaborative manner.

<h3>Examples of differences between the two:</h3>

Cloud computing is a client-server computing architecture, while Cloud Computing is a distributed computing architecture.
Cloud computing is a centralized executive, while Grid Computing is a decentralized executive.
In Cloud Computing, resources are used in centralized pattern. While in Grid Computing, resources are used in collaborative, shared pattern.
Cloud Computing is more flexible than Grid Computing
In Cloud Computing, the users pay for the use. Vice versa that is not the case.
Cloud Computing is a high accessible service, while Grid Computing is a low accessible service.
Cloud Computing can be accessed through standard web protocols, white Grid Computing is accessible through grid middleware.

7 0

3 years ago

n computing the current period's manufacturing cost per equivalent unit, the FIFO method of process costing considers: (CPA adap

kykrilka [37]

Answer:

C. current period costs less cost of beginning work-in-process inventory

Explanation:

While calculating the current period manufacturing under FIFO method the cost of beginning work in process will be deducted as was incurred in previous period, for the current period only the current period cost will be considered.

Though the FIFO method is based on first in first out principle where opening inventory will be sold first, but the cost incurred earlier in previous period will not be considered.

Correct statement is C

3 0

3 years ago

The midpoint method is used to compute elasticity because it A. automatically rounds quantities to the nearest whole unit. B. gi

gizmo_the_mogwai [7]

Answer:

B. gives the same answer regardless of the direction of change

Explanation:

The computation of the price elasticity of demand using mid point formula is shown below:

Price elasticity of demand = (Percentage change in quantity demanded) ÷ (percentage change in price)

where,

Percentage change in quantity demanded is

= (change in quantity demanded ÷ average of quantity demanded)

And,

The percentage change in price is

= (percentage change in price ÷ average of price)

Therefore, it reflects the same answer

6 0

3 years ago

Anna35 [415]

Part A

Answer and its explanation:

Interest earned in the third year can be found from following two steps

Step 1 Use compounding formula for first two years, which is as under:

Future value = Present Value * (1+r)^n

Here n is the number of years the amount would be deposited for, which is 2 years duration. And r is the rate of return which is 8% here. So the future value in the year 2 will be:

Future value = $1000 * (1 + 0.08)^2 = $1166.4

Now the interest earned in the third year is:

Interest earned in the third year = $1166.4 * 8% = $93.312

Part B

Answer and its explanation:

The simple interest is the interest arising from the principal investment made in the year zero to date and this can be calculated as under:

Simple interest = Principal investment * rate of interest * number of years

Simple Interest = $1000 * 8% * 3years = $240

And the interest arising from the compounding of interest can be found by the difference of the Future value of the investment for three years and simple interest.

So,

Interest arising through compounding of interest = FV of investment in three years time - (Simple Interest + Principal investment)

Interest arising through compounding of interest = $1000*(1+0.08)^3 -$1240

= $19.712

6 0

3 years ago

Because farm products have a low elasticity of demand a small change in output will have

GaryK [48]

<span>Because farm products have a low elasticity of demand a small change in output will have a similar effect on the price. Since the low elasticity of demand directly relates to </span>pricing, when the smaller change in output happens, a smaller drop in profits does as well. The price of the item will decrease to compensate for less products selling.

7 0

3 years ago