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sesenic [268]
2 years ago
5

What is the Best loan option for your lemonade Stand? Why?

Business
1 answer:
Arte-miy333 [17]2 years ago
4 0

Answer:

Short term loan

Explanation:

Lemonade stand can be regarded as a small business, Hence, the loan that suit the business is " Short term loan".

Short term loan can be regarded as loan that can be obtained to give support to ones personal as well as business capital. It is designed for the needs of small business capital with less interest compare to long term loan. The period of payment is usually within a year. It is of low risk and good profit.

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The effective interest rate is calculated through the equation,
                               ieff = (1 + i/r)^r - 1
where ieff is the effective interest, i is the nominal interest, and r is the number of 15 weeks in a year. Every year, there are 52 weeks. Thus, there are 3.467 15-weeks approximately. Substituting this into the equation,
                                  ieff  = (1 + 0.04/3.467)^3.467 - 1
                                  ieff = 0.04057
                                     ieff = 4.057%
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 i think B hope i could help!!
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