Financing a loan

Borrowing money to buy an expensive item become more and more common nowadays. What is more you may be financing a loan during the next several years. However, financing a loan is not as simply as it seems to be.

Borrowing intelligently requires an understanding of the three basic steps to negotiate a loan. Firstly, you should compare car loan sources. Secondly, it is necessary to compute interest. Thirdly, you should determine repayment time.

Numerous loan sources are available to borrowers. Loans for major purchases can be obtained from credit unions, banks, finance companies, or, for cars, the car dealers. If all other factors are equal, your choice will depend on which source will charge the lowest rate of interest.

Interest rate is one important factor that affects the cost of a loan. There are two basic methods of figuring interest – simple and compound. Using the simple method, the borrower repays the principal – the amount borrowed – and interest in one single payment to the lender. The repayment schedule for most loans actually is calculated by using compound interest – the add-on method. Payments are broken into even parts and that portion of interest and principal is paid back each month. Using the add-on method, the borrower must know the annual percentage rate or total finance charge on the loan rather than just the loan interest as in simple interest. Indeed, it is not necessary to know how to calculate the APR. By law the lender must tell the borrower the rate. Using the APR as a guideline, borrowers can more easily decide which loan is best suited to their purposes.

As to other factor that influences the cost of a loan it the length of time before the loan is completely repaid. Borrowers tend to see the lower monthly payments on longer-term loans as advantage. Although, borrowers often fail to realize that a longer repayment time increases the total cost of the loan

№23. The company's structure and development on the basis of "Harper and Grant Ltd."

The company of Harper & Grant Ltd. was started forty-two years ago by Ambrose Harper and Wingate Grant. Wingate Grant died many years ago, and his son Hector is the present Managing Director. Ambrose Harper is the Chairman. He is very old man and he comes to attend the board meetings and keep an eye on the business.

The company started by making steel wastepaper bins for offices. These wastepaper bins are more safer than the old type of basket made of cane or straw. Wingate Grant captured a big contract with government offices.

From wastepaper bins, Harper & Grant began to manufacture other items of office equipment: desks, chairs, cupboards, filing cabinets and smaller objects, such as filing trays, stapling machines and so on, until now when there are fifty-six different items listed in their catalogue. All items are made of pressed steel.

The factory consists of. These are divided into the Tool Room, Works Stores, Press Shop, Machine Shops, Assembly Shop, Paint Shop, Inspection, Packing and Despatch Departments. There is also the Warehouse.

The firm has a history of slow, steady growth. But Peter Wiles - Production Manager, and John Martin - Sales Manager think that they should be more adventurous. They want modernising a business by using modern things to run a business such as electronic data processing, Discounted Cash Flow, budgetary control, corporate planning, P.E.R.T. (Project Evaluation and Review Technique), automa­tion, etc. Harper &Grant Ltd., like their rivals, must get right up-to-date and enlarge their business, or they will be outpaced by a firm whose business organisation is better than their own.

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